Southeastern Colorado Co-op. v. Ebright, 76--067
| Decision Date | 28 October 1977 |
| Docket Number | No. 76--067,76--067 |
| Citation | 38 Colo.App. 326,563 P.2d 30 |
| Parties | SOUTHEASTERN COLORADO COOPERATIVE, Plaintiff-Appellee, v. Jack EBRIGHT and John Ebright, d/b/a Ebright Farms, Defendants-Appellants. . II |
| Court | Colorado Court of Appeals |
Andersen & Gehlhausen, S. Ford Andersen, Lamar, Mosley, Wells, Spence & Dean, James B. Dean, Denver, for plaintiff-appellee.
Johnson, McLachlan & DiCola, George McLachlan, Lamar, for defendants-appellants.
Head, Moye, Carver & Ray, Craig R. Carver, Denver, for Colorado Cooperative Council, amicus curiae.
Greg C. Hatfield, Englewood, David W. Dewey, Wichita, Kan., for Wichita Bank for Cooperatives, amicus curiae.
Plaintiff, Southeastern Colorado Cooperative (Coop), a nonprofit, nonstock, cooperative agricultural marketing association authorized to do business under § 7--56--101 et seq., C.R.S.1973, sued defendants, John and Jack Ebright, for goods sold and delivered. The Ebrights pled a set-off for accrued but unpaid patronage dividends and counterclaimed for the balance due. It was stipulated that any judgment in favor of the Coop would be against both Ebrights and that any set-off or counterclaim would be credited or awarded to both Ebrights against the Coop.
Based on an agreed statement of facts and on copies of the Coop bylaws, the Ebrights' membership certificate, and the Coop's ledger sheet showing the Ebrights' patronage dividend account, all stipulated to be correct, the court entered judgment for the Coop for $1,712.80, the amount agreed to be owing from the Ebrights, plus interest from the date of filing of the complaint. The court denied the set-off and dismissed the counterclaim on the ground that the withheld patronage dividends, amounting to an agreed $4,486.06 at the end of 1974, are not a debt owed by the Coop but are, instead, credits held by the Coop as trustee or agent, payable only upon dissolution or as determined by its board of directors. The Ebrights appeal the court's action on the set-off and counterclaim, and the effect of that on the ultimate judgment. We reverse.
Inasmuch as all of the facts were stipulated and the pertinent documents are before us, we are not bound by the trial court's findings or conclusions and may resolve the issues as a matter of law in this court. Stephenson v. Stephenson, 134 Colo. 96, 299 P.2d 1095; Burks v. Verschuur, 35 Colo.App. 121, 532 P.2d 757.
It was agreed that the Ebrights had been members of the Coop since 1960, that the Coop and the Ebrights have not been doing business with each other since the commencement of this lawsuit on March 26, 1975, and that the Ebrights have treated their membership with the Coop as terminated. It is stipulated, however, that the parties are subject to and governed by the bylaws of the Coop.
Under the bylaws, adopted pursuant to 7--56--111(1), C.R.S.1973, persons who are producers of agricultural products in the area are eligible for membership on the payment of a $5 membership fee, which is not returnable, and the investment of $95 in a 'certificate of interest,' which investment is repayable on dissolution of the Coop. By Article XII of the bylaws, the Coop is to establish and maintain a revolving capital credit fund in order to acquire and maintain adequate capital to finance its business, and May require investment in this fund by each member, from his patronage dividends or otherwise, within the limits specified in section 1(b) of Article XI of the bylaws, with revolving fund certificates or notices of book entries to be issued to the members to evidence credits in such fund. These capital credits may be repaid in whole or in part if and when, in the judgment of its board of directors, the net balance in the revolving fund exceeds the amount of capital reasonably needed by the association. These items are comparable to what, in for-profit corporations, are designated as capital and as paid-in or capital surplus.
The Ebrights have not asked for payment at this time of the $95 certificate of interest or of any capital credits, which are repayable only as set forth above. Rather, they asked for payment of $4,486.06 in patronage dividends accumulated in their account with the Coop from 1960 through 1974 based on patronage by them in wheat, other grain, merchandise, feed, and petroleum transactions with the Coop. The issue on this appeal is what are the Ebrights' rights with regard to these accumulated patronage dividends.
In view of the stipulation, their rights depend on the applicable provisions in the bylaws. According to Article XI of the bylaws, each member patronizing the Coop is entitled to receive from it that proportion of the 'members' net margins' received by the association which that member's patronage bears to the aggregate patronage of all members. 'Members' net margins' are determined by deducting from the Coop's gross receipts all of its costs, expenses, and other charges, and the net allocable to business done for nonmembers. The bylaws then provide, in Article XI, concerning 'Members' Net Margins':
Section 1. . . . Each . . . member . . .: (a) Shall . . . become entitled to have paid to him such proportion of the Members' Net Margins received by this association as his patronage bears to the aggregate patronage of all members, all as more particularly hereinafter defined and provided; (b) Shall . . . invest in the...
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