LEGAL PHASES OF COOPERATIVE ASSOCIATIONS 15 
Propositions embodied in valid by-laws are as binding on the 
members of an association as if included in the marketing contract. 
An egg association, acting in accordance with a by-law, allowed 
members to sell their eggs outside the association under specified 
conditions and, in a suit on its marketing contract by the association 
against a member who failed to comply with such conditions, the 
court held that the by-law was valid and virtually a part of the con- 
tract. 70 
Statutory provisions with respect to by-laws should be observed. 
In Oklahoma it has been held that if the statute under which an 
association is formed authorizes it to adopt a by-law requiring 
members to sell all of their products through the association and 
also one providing for liquidated damages upon condition that a 
by-law is adopted giving members an opportunity to withdraw, 
failure to adopt such a bj^-law voids by-laws adopted on the other 
two subjects and renders the marketing contracts of the association 
unenforceable. 71 It has been held that failure to adopt by-laws within 
the time provided by statute may not be used as a defense to a suit 
brought by an association against a member on his contract. 72 
The Supreme Court of Kansas held that a by-law reading " At any 
meeting a majority present in person or represented by proxy shall 
constitute a quorum for all purposes, including the election of 
directors, except when otherwise provided by law " meant that a 
majority of all the members of an association must be present in 
person or be represented by proxy at meetings of the association to 
authorize it to transact business. 73 
As indicating the possible scope of by-laws, a Nebraska case is 
interesting. It was held that a corporation not organized for profit 
and whose capital stock was fully paid up could lawfully require 
annual dues from its members. 74 
An invalid by-law, as such, creates no liability, but if not opposed 
to public policy is generally enforced as a contract between the 
members and between the corporation and its members. For in- 
stance, if the members of an association adopt what purports to be 
a by-law, but which is void for the reason that the corporation or 
association is not empowered by the law of the State in which it is 
incorporated or by its charter to adopt the particular by-law, it 
will, as a general rule, be enforced as a contract among those mem- 
bers who voted therefor or consented thereto. 75 
The term " constitution " is frequently used in connection with 
by-laws. So far as an incorporated association is concerned, the 
expression has no place. Incorporated associations have articles of 
incorporation (charters) but do not have constitutions. The use 
of the term with respect to incorporated associations only creates 
confusion. A " constitution " has been held to be only a by-law with 
an inappropriate name. 76 
70 Washington Co-op. Egg & Poultry Ass'n v. Taylor, 122 Wash. 466, 210 P. 806. 
71 Oklahoma Cotton Growers' Ass'n v. Salyer, 114 Okl. 77, 243 P. 232 ; McLain v. Okla- 
homa Cotton Growers' Ass'n, 125 Okl. 264, 258 P. 269. 
72 Tennessee Cotton Growers' Ass'n v. Hanson. 2 Tenn. Anp. 118. 
78 Everts et al. v. Kansas Wheat Growers' Ass'n et al., 119 Kan. 276, 237 P. 1030. 
74 Omaha Law Library Ass'n v. Connell, 55 Neb. 396, 75 N W. 837. 
75 Strong v. Minneapolis Automobile Trade Ass'n, 151 Minn. 406, 186 N. W. 800 ; New 
England Trust Co. v. Abbott, 162 Ma?s. 148, 38 N. E. 432, 27 L. R. A. 271. 
76 Supreme Lodge K. of P. v. Kutscher, 179 111. 340, 53 N. E. 620. 
