Minnesota Wheat Growers Co-Operative Marketing Association v. Radke

• Decision Date: 05 June 1925
• Docket Number: 24,719,24,723
• Citation: 204 N.W. 314,163 Minn. 403
• Parties: MINNESOTA WHEAT GROWERS CO-OPERATIVE MARKETING ASSOCIATION v. A. O. RADKE; MINNESOTA WHEAT GROWERS CO-OPERATIVE MARKETING ASSOCIATION v. COMMANDER ELEVATOR COMPANY AND ANOTHER
• Court: Minnesota Supreme Court

204 N.W. 314

163 Minn. 403

MINNESOTA WHEAT GROWERS CO-OPERATIVE MARKETING ASSOCIATION v. A. O. RADKE; MINNESOTA WHEAT GROWERS CO-OPERATIVE MARKETING ASSOCIATION v. COMMANDER ELEVATOR COMPANY AND ANOTHER

Nos. 24,719, 24,723

Supreme Court of Minnesota

June 5, 1925

Actions in the district court for Le Sueur county. From an order, Tifft, J., granting temporary injunctions in each case and from his orders sustaining plaintiff's demurrers to parts of the answers, defendants appealed. Reversed.

SYLLABUS

Section 27 of Co-operative Marketing Act of 1923 infringes constitutional liberty of contract.

1. Section 27 of chapter 264 of the Laws of 1923, prohibiting third parties to buy or handle products under contract to co-operative marketing associations, infringes the liberty of contract guaranteed by the state and Federal Constitutions and the remedies for violations of the section fall with it.

When purchase of staple commodity from owner is not a tort.

2. To buy from the true owner a staple wholesome commodity which is not under ban as to quality or use, cannot be made a tort simply because the buyer knows such owner has earlier agreed to sell it to another, and where the buyer has held out no questionable inducement to the seller to breach such earlier contract.

1. See Agriculture, 2 C.J. p. 998, § 26a (1926 Anno); Constitutional Law, 12 C.J. p. 949, § 460, p. 950, § 460 (1926 Anno); Statutes, 36 Cyc. p. 975.

2. See Torts, 38 Cyc. p. 508.

1. See note in 25 A.L.R. 1113.

Albert C. Remele and Moonan & Moonan, for appellants.

Arthur Le Sueur, for respondent.

OPINION

HOLT, J.

On the same briefs and arguments five appeals were submitted. Two cases were brought by plaintiff. One against A. O. Radke alleged to operate an independent elevator, for an injunction prohibiting him from purchasing grain from members of plaintiff and for $500 attorney's fees. The other against the Commander Elevator Company and its manager for injunction, liquidated damages, and attorney's fees. The defendants answered separately, and to the parts of the answers challenging the constitutionality of the law plaintiff demurred. In each case a temporary injunction was asked. The demurrers were sustained and the temporary injunctions granted. A separate appeal was taken by each defendant from the order sustaining the demurrers. And in each case there was an appeal from the order granting the temporary injunction.

Plaintiff was incorporated and operates under the Co-operative Marketing Act (L. 1923, p. 333, c. 264). The validity of the entire act is attacked. But, inasmuch as a decision has lately been filed upholding the law in every particular insofar as it relates to and governs the conduct of those who have become members of such an association, there remain only sections 26 and 27 of the act which are aimed at outsiders who maliciously attempt to induce members to break their contracts with co-operative marketing associations or spread false reports concerning them, and against those who purchase or aid in purchasing products under contract of delivery to such associations.

Fairly construed the complaints herein are based solely upon section 27 of the act which reads:

"Any dealer or prospective purchaser or any person, firm or corporation conducting a warehouse, elevator or other receiving station within this state who solicits or persuades or permits any member of any association organized hereunder to breach his marketing contract with the association by accepting or receiving such member's products for sale or for auction or for display for sale, contrary to the terms of any marketing agreement of which such person or dealer or prospective purchaser, or any member of the said firm or any active officer or manager of the said corporation has knowledge or notice, shall be liable to the association aggrieved in a civil suit in the penal sum of five hundred ($500.00) dollars for each such offense; and such association shall be entitled to [an] injunction against such dealer or prospective purchaser, or such person, firm or corporation to prevent further breaches of such marketing agreement and to prevent a multiplicity of actions thereon. In addition to other relief said warehouseman or other person, firm or corporation so offending shall pay to the association a reasonable attorney's fee to be fixed by the court and all costs involved in any such litigation or proceedings at law.

"This section is enacted in order to prevent a recurrence or outbreak of violence and to give marketing associations an adequate remedy in the courts against those who encourage violations of co-operative contracts."

The contention is made that the section can be and should be construed as applying to brokers and commission merchants only and not to purchasers of grain, such as these defendants. We think the contention untenable. The plain intent of section 27 is to reach every one who purchases or aids in disposing of for others than the association products, knowing that the same are offered for sale or disposal by a member who is under contract to deliver such products to the association. The reason which impels us to hold the section invalid when applied to purchasers is just as cogent when sought to be applied to brokers or commission merchants, viz., an arbitrary restraint of the liberty of contract.

Where parties voluntarily become members of an association operating under a statute fixing their rights and duties and providing remedies and penalties for breaches or violations they may be held to have agreed to all the terms of the statute, and are not in a favorable position to complain of infringement of the liberty of contract...