62 BULLETIN 110 6, U. S. DEPARTMENT OF AGRICULTURE 
Generally speaking, it is submitted that when members of an as- 
sociation believe that the directors they have elected to manage 
the association, or its officers or other agents, are not complying 
with its charter, by-laws, or marketing contract, they should be 
required to seek relief within the association through the election 
of new directors and officers, or the enjoining of them, or through 
other corrective measures. To use a figure of speech, the members 
of a cooperative association embark together for a common voyage 
and no member should be allowed to leave the ship except in accord- 
ance with specified conditions. 
MISMANAGEMENT NO DEFENSE 
Mismanagement of the affairs of an association — that is to say, 
unwise conduct of it — is no defense to a suit for breach of a market- 
ing contract. 43 The courts analogize the marketing contracts of an 
association for the delivery of products thereto to contracts of com- 
mercial corporations for the delivery of money thereto in payment 
for stock purchased, and the rule is that mismanagement of a com- 
mercial corporation is no defense to a suit for the recovery of the 
purchase price of stock. 44 
If a member of an association breaches his marketing contract 
during a given season, he can iiot successfully defend a suit brought 
by the association on account of such breaches by showing that sub- 
sequent thereto the association breached the contract. 45 The asser- 
tion by a producer that he received less for his products through the 
association than he would have received by selling to others is no 
defense to a suit for breach of the contract. 46 
DEDUCTIONS 
What deductions may an association make from the returns re- 
ceived from the products of its members ? The answer is, Only 
those deductions that it is authorized to make under the contract or 
by-laws of the association. 47 The fact that deductions in addition 
to those specifically authorized appear necessary or highly advisable 
does not justify such deductions. 
Money deducted from the returns from the sale of members' prod- 
ucts may be used by the association only for the specific purposes 
for which deducted. In other words, if the marketing contract or 
a by-law of an association specifies that deductions shall be made 
for certain itemized purposes, the deductions made can lawfully be 
employed for no other purposes. 
Membership fees, or dues, or money received from the sale of stock, 
or any other money, (unless received with the understanding that 
it is to be used for a specific object), may be used for any purpose 
or object covered by the charter of the association; and if the charter 
43 Nebraska Wheat Growers' Ass'n v. Smith, 115 Neb. 177, 212 N. W. 39 ; Pittman v. 
Tobacco Growers Co-op. Ass'n, 187 N. C. 340, 121 S. E. 634. 
44 Mississippi, Ouachita & Red River R. R. Co. v. Cross, 20 Ark. 443. 7 R. C. L. sec. 
235 ; Fletcher on Corporations, v. 2, sec. 652 : American Building & Loan Ass'n r. Rain- 
bolt, 4S Neb. 434, 67 N. W. 493. See also Brewer v. Boston Theater Co.. 104 Mass. 378. 
43 Nebraska Wheat Growers' Ass'n v. Smith. 115 Neb. 177. 212 N. W. 39 ; California 
Bean Growers Ass'n v. Rindge Land & Navigation Co., 199 Cal. 168, 24S P. 658, 47 
A. L. R. 904. 
46 Nebraska Wheat Growers' Ass'n v. Smith, 115 Neb. 177, 212 N. W. 39 ; Arkansas 
Cotton Growers' Co-op. Ass'n v. Brown, • Ark. . 16 S. W. (2d) 177. 
47 Silveira v. Associated Milk Producers, 63 Cal. App. 572, 219 P. 461. 
