68 BULLETIN 110 i 
The by-law in the Iowa case first cited, provided that any member 
of the association should forfeit 5 cents for every hundredweight of 
produce or livestock sold to any competitor of the association. The 
association bought and sold the produce and livestock of nonmem- 
bers as well as that of members. The by-law, on its face, was aimed 
at competitors of the association and did not disclose that its pur- 
pose was the maintenance and upkeep of the association. It will be 
remembered that provisions for liquidated damages are sometimes 
referred to as maintenance clauses on the well-founded theory that 
all members of a marketing agency should contribute to its main- 
tenance and upkeep even though they may not make use of it for 
a particular period. In the Iowa case, the court held that the by-law 
was unlawful as it was deemed to be in restraint of trade. 
In the other cases cited with the Iowa case just discussed, the courts 
reached similar conclusions and for the same reason. Subsequent 
to the decision of the Iowa cases, a cooperative marketing act was 
enacted in that State which expressly authorized associations to 
provide for liquidated damages in their contracts and by-laws, and 
under this act the supreme court of that State held that a provision 
in the by-laws of a livestock association for the payment of 25 cents 
per hundred pounds for all livestock marketed by members outside 
the association was valid. 78 So that, so far as associations incorpora- 
ted under the cooperative act of Iowa are concerned, they may 
provide for liquidated damages in their contracts or by-laws. 
In Colorado, the rule announced by the supreme court holding 
that provisions in contracts or by-laws which caused a member of 
an association to become liable to the association for a specified 
amount in the event he marketed his products outside the association 
were illegal, was changed by the supreme court in later cases in 
which the liquidated damage clause provisions were authorized by 
cooperative acts under which the associations were formed. 79 The Ala- 
bama case referred to was decided by an intermediate court of that 
State and was superseded by a decision of the supreme court of the 
State. 80 • ; 
In many of the cooperative statutes, language is included which 
expressly authorizes associations to include provisions in their 
contracts and by-laws for liquidated damages. These provisions in 
the cooperative statutes specify that the sums thus fixed shall be 
reasonable. The supreme courts of many of the States have passed 
upon the contracts of cooperative associations formed under such stat- 
utes and in every instance have upheld the provisions contained in 
them with respect to liquidated damages. For instance, 5 cents per 
pound in the case of tobacco, 81 5 cents per pound in the case of cot- 
ton, 82 25 cents per bushel in the case of wheat, 83 50 cents per box in 
78 Clear Lake Co-op. Live Stock Shippers' Ass'n v. Weir, 200 Iowa 1293, 206 N. W. 297. 
79 Rifle Potato Growers' Co-op. Ass'n v. Smith, 78 Colo. 171, 240 P. 937. 
80 Ex parte Baldwin County Producers' Corporation, 203 Ala. 345, 83 So. 69. 
81 Tobacco Growers' Co-op. Ass'n v. Jones, 185 N. C. 265, 117 S. E. 174. 33 A. L. R. 
231 ; List v. Burley Tobacco Growers' Co-op. Ass'n. 114 Ohio St. 361, 151 N. E. 471 ; 
Dark Tobacco Growers' Co-op. Ass'n v. Mason, 150 Tenn. 228, 263 S. W. 60 ; DarTc 
Tobacco Growers' Co-op. Ass'n v. Daniels. 215 Ky. 67. 284 S. W. 399 ; Dark Tobacco 
Growers' Co-op. Ass'n v. Robertson, 84 Ind. App. 51, 150 N. E. 106. 
83 South Carolina Cotton Growers' Co-op. Ass'n v. English, S. C. , 133 S. E. 
542 ; Cotton Growers' Co-op. Ass'n v. Bullock, 191 N. C. 464, 132 S. E. 154. 
83 Kansas Wheat Growers' Ass'n v. Schulte, 113 Kan. 672, 216 P. 311; Nebraska 
Wheat Growers' Ass'n v. Norquest, 113 Neb. 731, 204 N. W. 798. 
