LEGAL PHASES OF COOPERATIVE ASSOCIATIONS 59 
basis, such, for instance, as a cooperative livestock-selling agency. If 
a shipper to such an agency should draw a draft against it in con- 
nection with a shipment of livestock made thereto, and the proceeds 
of the livestock on their sale, after marketing expenses had been 
deducted, should be less than the amount of the draft, the cooperative 
i agency could then successfully sue the shipper for the difference 
between the amount of the draft and the net proceeds received for 
the livestock. 
The right of commission merchants and factors to recover the 
amount of excess advances made by them is settled, 33 and this would 
include cooperative associations that function along the same general 
lines. In the case of cooperative associations that use the purchase- 
and-sale or the agency type of contract, the obligation of the asso- 
ciation is to pay the member the amount received for his products 
on a pool basis, or otherwise, less authorized deductions. If a 
member, regardless of the type of contract involved, receives more 
than this amount, he has received something to which he is not 
entitled, and hence the association may recover it. A number of co- 
operative associations have done so. 34 
In the case just cited involving the California Raisin Growers' 
Association, the association, which functioned on an agency basis, 
successfully brought suit against some 600 growers on account of 
excess advances made to them, for the purpose of having the money 
distributed among members of the association who had been under- 
paid and among certain creditors of the association who were also 
parties to the suit. 
In the case of excess advances or payments made by an association 
that functions on a pool basis, there is always the possibility, and in 
many instances it probably would be a fact, that some members had 
received less than they were entitled to, whereas other members had 
received more than the amount to which they were entitled. This 
situation would furnish an additional reason for allowing an asso- 
ciation to recover excess advances. The principles under discussion 
are applicable, even in cases in which an association in its contract 
agrees to make an advance of a specified amount to growers, which 
amount proves to be excessive, because both parties assume that the 
products will bring a net amount larger than the advance. If this 
assumption proves to be incorrect, the necessary adjustments are in 
order. The association contracts to pay to its members only the 
net amount received by it for their products, minus authorized de- 
ductions. If more is paid, a member has received something to 
which he has no claim. No reason is apparent why these principles 
would not be as applicable to an unincorporated as to an incorporated 
association. 
If an association made excess advances to its members with bor- 
rowed money and the advances proved to be excessive, resulting in 
the insolvency of the association, unless the excess advances were 
83 Re Estate of Joseph P. Murphy Co., 214 Pa. 258, 63 A. 745, 5 L. R. A. (N. S.), 1147; 
Newburger-Morris Co. v. Talcott, 219 N. Y. 505, 114 N. E. 846, 3 A. L. R. 287. 
"Arkansas Cotton Growers' Co-op. Ass'n v. Brown, Ark. , 16 S. W. (2d) 177; 
California Raison Growers' Ass'n v. Abbott, 160 Cal. 601, 117 P. 767 ; Sugar Loaf Orange 
Growers' Ass'n v. Skewes, 47 Cal. App. 470, 190 P. 1076; California Bean Growers' Ass'n 
v. Williams, 82 Cal. App. 434, 255 P. 751 ; Lake Charles Rice Milling Co. v. Pacific Rice 
Growers Ass'n. 295 P. 246 ; see also Farmers' Union Co-op. Shipping Ass'n of Natoma v. 
Schultze, 112 Kan. 675, 212 P. 670. 
