LEGAL PHASES OF COOPEKATIVE ASSOCIATIONS 69 
the case of fruit, 84 and 5 cents per dozen in the case of eggs, 85 have all 
been upheld. 
It should not be assumed from the foregoing that an association, 
even under a statute authorizing it to provide for liquidated dam- 
ages is free to fix any amount as such damages. On the contrary, 
the amount should always be reasonable and not so extravagantly 
large as to indicate that compensation to the association is not the 
object sought to be accomplished. When the legality of cooperative 
associations was once established, it followed as a matter of course 
that such associations were entitled to provide for liquidated dam- 
ages under circumstances comparable with those under which other 
entities might provide for and recover such damages, because 
liquidated damages were well known to the common law and are in 
no sense peculiar to cooperation. At the present time it is believed 
that cooperative associations in each of the States may provide for 
liquidated damages by reason of provisions existing in the statu- 
tory law of the State or by reason of the common law. 
Some interesting cases involving liquidated damages have been 
before the courts. In a Kentucky case a member of the .Dark 
Tobacco Growers' Cooperative Association rented his farm for cash 
rent and went to the city and there worked as a carpenter. The 
association sued the landlord for liquidated damages of 5 cents per 
pound on account of the tobacco grown and sold by the tenant, who 
was not a member of the association and who marketed the tobacco 
through other channels. The contract of the landlord with the 
association covered all the tobacco grown on his land. The court 
held that the association was entitled to recover liquidated damages 
amounting to $250, and referred to a provision in the cooperative 
act of Kentucky, which declares that it is a conclusive presumption 
that a member controls the products grown on his land. 86 
Again it has been held that the inability of a member to deliver 
his products because of a crop mortgage, does not prevent the asso- 
ciation from recovering liquidated damages on account of his failure 
to deliver. 87 
In the cases last cited there were no exceptions in the contracts 
excusing failure to deliver because of the reasons therefor. Hence, 
the courts followed the general rule that impossibility of perform- 
ance of a contract, unless created by an act of God, the law, or the 
complaining party, does not, as a rule, excuse failure to perform. 88 
In other words, the members in the cases cited had agreed to deliver 
their products, and having failed to do so without a lawful excuse, 
they were liable for liquidated damages. 
In drafting a provision for liquidated damages, care should be 
taken that the rule prescribed for ascertaining the damages will be 
fair, equitable, and clear under all circumstances. For instance, a 
provision for the payment of $10 per cow in the event^ a member 
marketed any milk outside the association has been criticized on the 
84 Lee v. Clearwater Growers' Ass'n, Fla. , 111 So. 722; Anaheim Citrus 
Fruit Ass'n v. Yeoman, 51 Cal. App. 759, 197 P. 959. n ,. 
83 Poultry Producers of Central California v. Nilsson, 197 Cal. 245, 239 P. 1086. 
86 Dark Tobacco Growers' Co-op. Ass'n v. Daniels, 215 Ky. 67, 284 S. W. 399. 
87 North Carolina Cotton Growers' Co-op. Ass'n v. Bullock, 191 N. C. 464, 132 S. B. 
154 ; Bishop v. Alabama Farm Bureau Cotton Ass'n, Ala. , 110 So. 711 ; Kansas 
Wheat Growers' Ass'n v. Ast et al., 118 Kan. 247, 234 P. 963 ; Lennox v. Texas Farm 
Bureau Cotton Ass'n (Tex. Civ. App.), 16 S. W. (2d) 413. 
88 Dermott v. Jones, 2 Wall. 1. 
