Appeal
from Circuit Court, Marion County; George G. Bingham and
Percy R. Kelly, Judges.
Action
by the Phez Company against the Salem Fruit Union and others.
From judgment for defendants, plaintiff appeals. Reversed and
remanded, with directions.
This is
a suit brought by the plaintiff to enforce by injunction the
performance by defendant Salem Fruit Union of a contract
entered into on May 24, 1917, between the Northwest Fruit
Products Company, plaintiff's predecessor, and the
defendant, whereby defendant agreed to sell and deliver to
plaintiff's predecessor about 1,200 tons of fresh
loganberries of the crops of 1917, 1918, 1919, 1920, and
1921, at the agreed price of 3 cents per pound for the crop
season of 1917, and thereafter during the remaining years at
the rate of $61.50 per ton. Said berries were to consist of
the entire crops of certain growers named therein and
including those mentioned made defendants in this action. The
contract is designated Exhibit A to plaintiff's
complaint, and its due execution is not disputed. Said
exhibit is too long to be set out in this statement, but such
features of it as are essential are referred to in the
opinion.
The
complaint alleges that contemporaneously with the execution
of Exhibit A the defendant Salem Fruit Union, for the
protection of itself and plaintiff's predecessor, entered
into a written agreement with each of the defendant growers
of loganberries, which contract provided that each grower
should sell and deliver to the fruit union all the
loganberries grown during the years above mentioned upon
certain specified tracts of land, the acreage and estimated
tonnage of each tract being particularly specified. Other
conditions of this contract are as follows:
"3.
The grower agrees that his fruit may be sold and the
proceeds prorated under such pooling system as is now used
or shall hereafter be adopted by the union.
"4.
The grower agrees that the union shall have, and he hereby
gives and grants to the union, a first lien or crop
mortgage on all his crop of fruit growing or to be grown on
said premises to secure the payment of any indebtedness now
owing by him to the union or any indebtedness which he
shall hereafter incur to said union by virtue of this
contract or transactions arising thereunder. The grower
hereby authorizes and instructs the union to deduct from
the proceeds of the sale of his fruit any sums which he may
owe the union.
"5.
The union agrees to receive, store and market said
grower's fruit, provided said fruit is, in the judgment
of the union, of marketable standard and quality, and it is
understood and agreed that the union shall not be liable
for any unavoidable loss, damage or injury, or for any
unavoidable failure to secure storage or to sell said
fruit.
"6.
The union agrees to pay over to the grower the entire
proceeds of the sale of his fruit after deducting such
amounts as the grower shall then be indebted to the union
such indebtedness to include all handling and marketing
charges as filed and assessed by the board of directors of
the union, which charges shall be sufficient to pay the
general operating expenses; such indebtedness shall also
include all the accounts for supplies purchased, for stock
subscribed or money advanced.
"7.
The grower hereby appoints the union his exclusive agent
and hereby gives said union an exclusive right to sell said
fruit.
"8.
Whereas the union must provide for the payment of certain
overhead expenses and fixed charges and must expend such
sums as are necessary to keep in touch with crop and market
conditions and must provide warehouse and storage
facilities in proportion to the tonnage contracted; and
whereas such expenses should be prorated over all of the
fruit contracted to be sold, the grower therefore agrees
that in the event he withholds his fruit or any part
thereof in contravention of this agreement, he will pay to
the union for each package of fruit so withheld as
liquidated damages for such violation of his contract, the
sum of ten cents (10 c.) for each box of apples or pears
ten cents (10 c.) for each crate of berries or cherries
five cents (5 c.) for each crate or box of prunes or
peaches, and for other varieties of fruit an amount in such
proportion to above charge made for apples as the average
market price of apples during the season in which the
violation occurred.
"9.
The grower agrees that in the event suit or action is
brought to recover for supplies furnished, services
rendered or expenses incurred or to enforce any of the
provisions of this contract, to pay such attorneys'
fees in such suit or action as the court shall adjudge
reasonable.
"10.
It is mutually understood and agreed that this contract
shall remain in effect for a period of time from date until
March 1, 19--, and every year thereafter continually until
canceled by one of the parties hereto, providing that it
shall only be canceled on the first day of March of any
year after said period by the party so canceling giving
notice in writing to the other party thereto during the
twenty days prior to said March first, that he desires to
cancel his contract; provided, however, that neither party
shall cancel this contract until that party shall have
fully paid any indebtedness due by it or him to the other
party, including all stock subscriptions due or to come due
or notes given for the same."
It
further appears that about January, 1918, the defendant union
secured from a large majority of the growers a contract
materially modifying the contract as it appears in Exhibit B
above set out. The form of such modification is set forth as
Exhibit C to the complaint, and is as follows:
"This
agreement, made this _____ day of _____, 19--, by and between
Salem Fruit Union, a corporation, hereinafter referred to as
the union, and _____ of the county of _____, state of Oregon
hereinafter referred to as the grower, witnesseth, that for
and in consideration of the covenants and agreements herein
contained, the said grower does hereby constitute and appoint
the said union, as his sole and lawful agent, to enter into
contract for him, and on his behalf, and in his name, for the
sale of all the loganberries to be grown upon his premises
for the years 1918 to 1921, inclusive, which crop of berries
shall be delivered to said union to be sold by it, with other
growers entering into similar contracts with such union,
which shall constitute a pool, and shall be designated as the
'1917 Five-Year Loganberry Pool,' which said pool
shall be sold in its entirety by said union to the Northwest
Fruit Products Company, at three and one-half cents (31/2
cents) per pound net to said grower, and the grower, as part
of said pool, hereby gives the said union full power of
attorney to make said sale.
"That
the yard herein mentioned consists of approximately _____
acres and is located near _____, Marion county, Oregon, and
the crop of the year 19--is estimated at _____ tons.
"That
said berries, in the judgment of the union, shall be
marketable and of standard quality, to be delivered by the
grower to the Northwest Fruit Products Company or its assigns
at their factory or subject to their order, in accordance
with terms and conditions of said authorized contract. Grower
agrees to care for and harvest the crop in a husbandlike
manner.
"In
case said Northwest Fruit Products Company shall fail by
reason of act of God or public enemy or other unavoidable
occurrences, to perform its part of such agreement, or any
part thereof, entered into with said union as the agent of
the grower, the said grower agrees that his said fruit may be
handled in said pool with the fruit of other growers making
contracts similar to this, for any year or years or portions
of a year that the Northwest Fruit Products Company shall be
so prevented from fulfilling its part of the agreement, in
which event said union shall market said fruit as a
continuation of the said five-year loganberry pool of 1917,
to the best advantage of the grower as the judgment of the
board of directors of said union may dictate. The said grower
shall receive his pro rata of the net returns for the sale of
said pool after deducting for the services in the handling
and marketing of such fruit, the charges and assessments that
may be made by the board of directors of said union, which
may be deducted from the amount of the money received from
the sale of said fruit before paying the same to the grower.
"The
grower agrees that in the event of suit or action brought to
recover for supplies furnished, services rendered or expenses
incurred or to enforce any of the provisions of this
contract, to pay such attorney's fees in such suit or
action as the court shall adjudge reasonable.
"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 and shall continue to be in full force and effect
during the crop years of 1918, 1919, 1920 and 1921. It being
understood that upon the execution of this contract, the
former contract heretofore entered into on the _____ day of
_____, 19--, between the undersigned grower and said union,
shall become null and void and of no effect, except that the
pool created by such agreement shall be continued by this
agreement. This agreement is binding upon the successors and
assigns of each party hereto.
"In
witness whereof, the said parties have hereunto set their
hands this _____ day of _____, 19--.
Salem
Fruit Union,
"By
________
"_________
"Grower."
The
complaint alleges that plaintiff and its predecessor in
interest have been at all times...
