LEGAL PHASES OF COOPERATIVE ASSOCIATIONS 13 
cooperative associations shall adopt by-laws within a certain length 
of time after their formation. In the absence of a statutory require- 
ment it is not necessary, although highly desirable, for an association 
to adopt by-laws. The power to adopt by-laws resides in the stock- 
holders or members, and they alone have the power to adopt them 
in the absence of a provision in the general law or in the charter, 
placing it in the hands of a select body. 
If the statute under which an association is incorporated authorizes 
the making of by-laws on specific subjects, barring constitutional 
questions, the association may adopt by-laws covering those subjects, 
but even where the power to adopt by-laws is thus expressly con- 
ferred the by-laws should be reasonable and fair. Statutory require- 
ments and limitations should be compiled with, and by-laws in con- 
flict with them fail. 52 A by-law is void if it contravenes limitations 
in the State or Federal constitution. 53 A by-law that is valid when 
made may be rendered invalid by a statute subsequently adopted. 54 
The purpose of by-laws is to provide rules for the regulation of 
the affairs of the corporation. They can make provision consistent 
with law and with the charter for any matter or thing relative to 
the conduct or business of the corporation. For instance, independent 
of statute, it has been held that by-laws may provide for liquidated 
damages, 56 a subject that will be discussed later. By-laws should 
perform the same office for a corporation or association that a blue 
print performs for a builder. They should constitute a working plan 
for the corporation. Among the matters usually provided for in 
the by-laws of a corporation are the following: The time, place, 
and manner of calling and conducting its meetings and the giving 
of notice thereof, the number of members constituting a quorum, 
the qualifications and duties of directors and officers and their com- 
pensation, if any, and suitable penalties for violation of the by-laws. 
A by-law must be general in its application and not aim at a par- 
ticular member. 56 
By-laws are to be distinguished from rules adopted for the guid- 
ance of the public dealing with the association. The members of a 
corporation and its directors and officers are usually conclusively pre- 
sumed to have notice of by-laws, and of what they contain, and hence 
are bound by them, although, as a fact, they may be ignorant of 
them. 57 
The great importance of members, officers, and directors knowing 
the provisions of the by-laws of their association is thus apparent. 
On the other hand, strangers having no knowledge of by-laws are 
not bound by them unless perhaps where specifically authorized by 
statute. 58 
If notice of by-laws, either actual or constructive, reaches strangers 
they are usually held to be binding on them. 59 
52 Oklahoma Cotton Growers Ass'n v. Salyer, 114 Okla. 77, 243 P. 232; Noble v. Cali- 
fornia Prune & Apricot Growers' Ass'n, Cal. App. , 276 P. 636. 
53 Spayd v. Ringing Rock Lodge No. 665, 270 Pa. 67, 113 A. 70, 14 A. L. R. 1443. 
54 Grisim v. South St. Paul Live Stock Exchange, 152 Minn. 271, 188 N. W. 729. 
65 Ex Parte Baldwin County Producers' Corporation, 203 Ala. 345, 83 So. 69. 
56 Budd v. Multnomah St. Ry. Co., 15 Or. 413, 15 P. 659. 
57 Washington Co-op. Egg & Poultry Ass'n v. Taylor, 122 Wash. 466, 210 P. 806 ; Brent v. 
Bank of Washington, 10 Pet. 594 ; Columbia Bldg. & Loan Ass'n v. Junquist, 111 F. 645. 
58 McKinney v. Mechanics' Trust & Savings Bank, 222 Ky. 264, 300 S. W. 631. 
59 Harley v. Hartford Fruit Growers' & Farmers' Exchange, 216 Mich. 146, 184 N. W. 
507; Rathbun v. Snow, 123 N. Y. 343, 25 N. E. 379, 10 L. R. A. 355; Iowa-Missouri Grain 
Co, v. Powers, 198 Iowa 208, 196 N. W. 979, 33 A. L. R. 1268. 
