28 BULLETIN 1106, U. S. DEPARTMENT OF AGRICULTURE. 
paying 1 cent per bushel to the association for all grain so sold. A 
stockholder who had agreed to the by-law sold 3,500 bushels of 
grain to a competitor of the association, and it brought suit against 
him to recover $35. The by-law was held invalid on the ground that 
it was in restraint of competition, and the association lost the suit. 
In this case the association dealt with members and nonmembers. 
In many of the States there are statutory provisions relative to 
liquidated damages, and such provisions should be carefully heeded. 97 
Whether the provision in the by-law or the contract of an associa- 
tion which purports to require a member to pay a certain sum of 
money to the association in case he disposes of produce or live stock 
outside the association will be held valid in a particular State will 
depend upon the constitution, statutes, and general law thereof. 
In all States the amount named as liquidated damages should be 
a reasonable one and not an amount manifestly in excess of the 
damages that may be suffered. The by-laws in the Iowa and Colo- 
rado cases were held invalid on the theory that they were opposed 
to public policy in that they tended to restrain trade or competi- 
tion. There are a number of other cases which uphold the legality 
of a liquidated damage clause provision. 
RUNNING WITH LAND. 
Contracts entered into by cooperative associations with their 
members sometimes contain clauses which provide that the contract 
shall " run with the land " ; that is, that the purchaser of the 
farm shall be obligated by the contract entered into by a former 
owner of the farm with the association. Is such a provision binding 
on the purchaser of the farm? Of course, if the cooperative associa- 
tion and the purchaser of the farm acquiesce in the matter no ques- 
tion would arise. But in case the purchaser of the farm refuses 
to recognize the provision in the contract referred to, what is the 
The only case that has been found relative to a cooperative associa- 
tion in which this question was raised is an Oregon one. 98 In this 
case the contract involved contained a provision reading as follows : 
It is understood that the conditions herein contained shall run with the 
land on which said berries are to be raised and shall bind the parties herein, 
their heirs, administrators, and assigns. 
The court said with reference to this provision : 
The clause providing that the covenants in the agreement should " run with 
the land " was no doubt considered important. Although it is doubtful whether 
it could be enforced in an action at law. * * * Whether an equitable rem- 
edy would arise out of such a covenant need not here be considered. 
o* Stark v. Skernada, (Calif.) 204 Pac. 214. 
"Poultry Producers of Southern Calif, v. Barlow. (Calif.) 208 Pac. 93; Washington 
Cooperative E. & P. A. v. Taylor, (Wash.) 210 Pac. 806; Tobacco Growers' Association 
v. Jones, (1923) North Carolina . 
ss Phez v. Salem Fruit Union, 201 Pac. 222, 205 Pac. 970. 
