LEGAL PHASES OF COOPERATIVE ASSOCIATIONS 111 
be required to comply with the laws of the latter State respecting 
foreign corporations, if it sells its products in the original packages 
in which they are shipped into the State through a commission man, 
factor, or broker, or through the medium of its own exclusive agent 
located in that State ; nor may the latter State impose a tax for doing 
business, either on the cooperative association or upon its agent, on 
account of such business. 
Generally speaking, a State has the right to oust a corporation for 
violation of its laws. The Burley Tobacco Growers' Cooperative 
Association, incorporated under the laws of Kentucky, complied 
with the laws of Tennessee relative to foreign corporations and began 
to do business in that State. Later the State of Tennessee instituted 
ouster proceedings against it on the ground that the association had 
been guilty of coercion in obtaining contracts and was seeking to 
restrain trade unreasonably. It was held, however, that the associa- 
tion was not guilty of the things charged and that it was entitled to 
do business in Tennessee. 54 
A distinction should be drawn between the right of a State to tax 
physical property and the right of carrying on an essential element 
of interstate commerce in that State. Physical property, such as 
commodities, 55 trucks, buildings, or equipment, owned by a coopera- 
tive association in a State other than that in which it is organized, 
or similar property owned by the agent of the association in that 
State, is subject to the normal and customary property taxes free 
from discrimination within that State. 56 
If a cooperative association or other corporation is doing an intra- 
state business in a State other than that in which it is organized, it 
is a serious matter for it to fail to comply with the laws of that 
State regarding foreign corporations. In many States, an associa- 
tion could not sue in the courts of the State, nor could it enforce its 
obligations in the Federal courts if it had failed to comply with such 
laws. In Tennessee, the shareholders of a foreign corporation, under 
the circumstances in question, are liable as partners. 57 In Colorado, 
the officers and agents of such a corporation are personally liable. 56 
ASSOCIATIONS AND THIRD PERSONS 
If products in the custody of an association are injured, for 
instance, by fire caused by the negligence of a third person, an associa- 
tion may bring suit for the recovery of the damages in question. 59 
Again, if a person has entered into a contract with an association to 
buy a specified quantity of products, the association may sue for 
failure to comply with the contract. 60 On the other hand, if a 
cooperative enters into a contract to sell a specified quantity of pro- 
ducts, ordinarily it may be successfully sued for failure to abide by 
the contract. 61 It should be remembered that if an association makes 
an unconditional contract to sell a specified quantity of products^ the 
54 Tennessee v. Burley Tobacco Growers' Co-op. Ass'n, 2 Tenn. App. Rep. 674. 
E5 Sonneborn Bros. v. Cureton, 262 U. S. 506. 
66 Southern Ry. Co. v. Kentucky, 274 U. S. 76, 47 S. Ct. 542. 
« Cunnyngbam v. Sbelby, 136 Tenn. 176, 188 S. W. 1147, L. R. A. 1917B 572. 
E8 Fritts v. Palmer, 132 U. S. 282. 
59 Louisville & N. R. Co. v. Burley Tobacco Society, 147 Ky. 22, 143 S. W. 1040. 
60 National Importing Co. et al. v. California Prune and Apricot Growers, Inc., Ina. 
App. , 151 N. E. 626. 
61 Eskew et al. v. California Fruit Exchange, Cal. App. . 263 P. 804. 
