46 BULLETIN 1106, U. S. DEPARTMENT OF AGRICULTURE 
BANKRUPTCIES— RECEIVERSHIPS 
A cooperative association may not be thrown into involuntary 
bankruptcy because the bankruptcy statute, so far as involuntary 
bankruptcies are concerned, applies only to " moneyed, business, or 
commercial corporations." 5T 
If cause therefor exists, a receiver may be appointed for a coopera* 
tive association. Insolvency — that is, inability to meet the demands 
of creditors — generally speaking, is one of the most common causes 
for the appointment of a receiver. In an Arkansas case 58 the court 
refused to appoint a receiver because of breaches of the marketing 
contract by the officers of the association, and refused to release the 
members involved from their contracts on account of such breaches. 
The court pointed out that " the rule is not to appoint a receiver 
when the specified acts complained of may be remedied by injunc- 
tion or are capable of redress by other available means." 
The function of a receiver is to collect the assets and apply them 
on the debts of the concern involved. For instance, if an association 
had overpaid a member and a receiver was appointed for the associ- 
ation, the receiver could sue the member and collect the amount of 
the excess payment. 59 
A receivership does not terminate or dissolve an association. It 
simply substitutes the management of the receivers for the manage- 
ment of the officers and directors of the association for the life of 
the receivership. 60 
MARKETING CONTRACTS 
A contract has been defined as an agreement between competent 
parties, upon sufficient consideration, to do or not to do a particular 
lawful thing. 61 In order to be binding and enforceable a contract 
must possess mutuality; that is, both parties must be bound, or 
neither will be. For instance, if one party agrees to sell a certain 
article, the other must agree to buy, or the agreement is void. 62 
A contract or agreement by which a member of a cooperative asso- 
ciation appoints the association his agent for the sale and marketing 
of his product, to be valid should also contain a provision in which 
the association agrees to act as such agent and do the work in ques- 
tion. The question of whether cooperative marketing contracts 
possess mutuality has been before the courts in many cases. The 
courts, without exception, have held that marketing contracts pos- 
sessed mutuality. 63 
Inasmuch as marketing contracts universally require the associa- 
tion to do certain things, while obligating the members to do certain 
57 In re Dairy Marketing Ass'n of Ft. Wayne, Inc.. S F. (2d) 626. 
5S MeCanley v. Arkansas Rice Growers' Co-op. Ass'n, 171 Ark. 1155. 287 S. W. 419. 
50 Cunningham v. Long (Maine Potato Growers' Exchange). Me. 135. A, 198. 
6 » Gaboury v. Central Vermont Ry. Co.. 250 N. Y. 233, 165 X. E. 275. 
61 Blackstone's Commentaries, v. 1, Book II. p. 442. 
62 American Cotton Oil Co. v. Kirk, 68 F. 791 ; Willard, Sutherland & Co. v. Fnited 
States. 262 U. S. 489. 
63 Warren v. Alabama Farm Bureau Cotton Ass'n. 213 Ala. 61, 104 So. 264: Rifle Potato 
Growers Co-op. Ass'n v. Smith, 78 Colo. 171. 240 P. 937 ; Milk Producers' Marketing Co. 
v. Bell, 234 111. App. 222 ; Burley Tobacco Growers' Co-op. Ass'n v. Rogeps. ■ Ind. App. 
, 150 N. E. 384 ; Louisiana Farm Bureau Cotton Growers' Co-op. Ass'n v. Clark, 160 
La. 294, 107 So. 115 ; Minnesota Wheat Growers' Co-op. Marketing Ass'n v. Huggins, 162 
Minn. 471. 203 N. W. 420 ; Oregon Growers Co-op. Ass'n v. Riddle. 116 Or. 562. 241 P. 
1011 ; Dark Tobacco Growers' Co-op. Ass'n v. Mason, 150 Tenn. 22S, 263 S. W. 60. 
