Rifle Potato Growers' Co-Op. Ass'n v. Smith

• Decision Date: 19 October 1925
• Docket Number: 11142.
• Citation: 240 P. 937,78 Colo. 171
• Parties: RIFLE POTATO GROWNERS' CO-OP. ASS'N v. SMITH.
• Court: Colorado Supreme Court

240 P. 937

78 Colo. 171

RIFLE POTATO GROWNERS' CO-OP. ASS'N v. SMITH.

No. 11142.

Supreme Court of Colorado, En Banc.

October 19, 1925

Error to District Court, Garfield County; John T. Shumate, Judge.

Suit by the Rifle Potato Growers' Co-operative Association, a corporation, against Dexter Smith. Judgment for defendant and plaintiff brings error.

Reversed.

Under Contracts.

Laws 1923, p. 420, giving, by sections 1 and 3, to agriculturists right to make a contract for co-operative marketing, held not violative of Const. art. 5, § 25, as class legislation.

John F. Reynes, Erskine R. Myer, Lindsey &amp Larwill, and D. K. Wolfe, Jr., all of Denver, for plaintiff in error.

John L Noonan and W. F. Noonan, both of Glenwood Springs, for defendant in error.

Ponsford, Pender & Larwill, of Denver, amici curiae.

T. H. Hood, of Denver, amicus curiae.

DENISON, J.

The plaintiff in error was plaintiff below, and was defeated on trial to the court in a suit to enjoin Smith from disposing of his potatoes in violation of a marketing contract executed by plaintiff and defendant under the act of 1923, S. L. 1923 c. 142, and the case comes here on error.

Smith was a potato grower; he joined the plaintiff company, and signed the standard marketing contract by which he agreed to sell his potatoes to plaintiff only. He sold to others and threatened to continue to do so, whereupon plaintiff brought this suit.

His first defense is that the contract is unilateral, and so void or voidable or unenforceable. He is twice wrong: (1) Because a unilateral contract is as good as any. A unilateral contract is an agreement supported by an executed consideration. 13 C.J. 247. (2) This contract is not unilateral but bilateral, a promise for a promise. Id. We think he means that there was no consideration; but the contract of the company to buy, resell, and, on certain conditions, give him something out of the proceeds, is a good consideration. That the contract is unfair to him, that it gives the company too much advantage and power, and that, as it turns out, Smith really gets no benefit from the contract, even if true, are irrelevant. Such matters were for his consideration before he entered it. But perhaps he means that the contract ought not to be enforced by injunction because its obligations are not mutual. The mutuality is between the several members, and the contract is for their benefit. The contract expressly and impliedly shows this. Section 16, Abst., p. 129, reads:

'This agreement is one of a series generally similar in terms, comprising with all such agreements, signed by individual growers, or otherwise, one single contract between the association and the said growers, mutually and individually and annually obligated under all of the terms thereof. The association shall be deemed to be acting in its own name for all such growers, in any action or legal proceedings on or arising out of this contract.'

And section 19, Abst., p. 131:

'It is expressly agreed that this instrument is one of a series substantially identical in terms. All such instruments shall be deemed one contract for the purpose of binding the subscriber, to the same extent as if all the subscribers had signed only one such contract.'

Every member is subject to the same remedy in favor of all the others, and without some such remedy the contract would be ineffectual.

Second, he claims that the contract is against public policy. In Burns v. Wray Co., 65 Colo. 425, 176 P. 487, 11 A.L.R. 1179, and Atkinson v. Colo. Wheatgrowers' Association (Colo.) 238 P. 1117, we held such contracts were against public policy, but the act of 1923 changes the public policy of this state and the contract in this case follows the act. It is unnecessary to cite authority for the power of the Legislature over questions of public policy, but see Tihen v.

Denver (Colo.) 235 P. 777; No. Wis. Co-op. Tobacco Pool v. Bekkedal, 182 Wis. 571, 197 N.W. 936; Pulpwood Co. v. Green Bay, etc., Co., 168 Wis. 400, 170 N.W. 230; Dark Tobacco, etc., Ass'n v. Mason, 150 Tenn. 228, 263 S.W. 60.

It is objected that the contract is in restraint of trade and so void under the Colorado Anti-Trust Law (C. L. 1921, §§ 4036-4043), but the act of 1923, being the later act, controls the earlier.

It is claimed that the act of 1923 is unconstitutional, and many of its provisions are cited to show that it is so; but most of them are irrelevant to any question now before us; and the fact, if it be a fact, that they are unconstitutional will not affect the constitutionality of the sections upon which this case depends. The only provisions of the act in question here are that authorizing the combination agreement to sell to one purchaser and section 19, par. (b), which authorizes the remedies of injunction and specific performance for breach of such contract. It hardly needs to be said that the act is not unconstitutional because it changes the rule of public policy. That would be to set public policy upon the throne of the Constitution, and, though it is urged with great seriousness and earnestness that the provision for an injunction is unconstitutional, or, at least, unenforceable, because it permits an injunction where there is no equity, yet that argument, upon examination, has no more force in it than the one concerning public policy, because the Legislature has as complete power over the rules of equity as it has over those of law. So of the provision for specific performance. It is a rule of equity that specific performance will not be granted in favor of one party unless it could have been granted in faver of the other. But that is a rule made by the courts which the Legislature has a right to change, and, moreover, as we have shown above, there is mutuality in this contract, since it is a contract among the members, and injunction and specific performance are to be enforced against any member who violates it in favor of all those who do not. As to the validity of this paragraph see Wash. Cranberries Ass'n v. Moore, 117 Wash. 430, 201 P. 773, 204 P. 811, 25 A.L.R. 1077; Phez v. Salem Fruit Union, 103 Or. 514, 201 P. 222, 205 P. 970, 25 A.L.R. 1090, and cases there cited. Indeed, we agree with these cases that equity is necessary to adequately enforce these contracts; specific performance, where possible, or injunction to the same end.

It is claimed that the act of 1923 is unconstitutional because it is 'class legislation.' The term 'class legislation' is too indefinite for consideration. What is meant is that the act is in violation of article 5,§ 25, of the Colorado Constitution, because it gives to agriculturists what is denied to other citizens--the right to make a contract for co-operative marketing.

In support of the act the plaintiff in error has cited Oregon Growers' Co-op. Ass'n v. Lentz, 107 Or. 561, 212 P 811. ...