The Kansas Wheat Growers Association v. H. J. Floyd and The Farmers State Bank of Wichita

• Decision Date: 05 July 1924
• Docket Number: 25,350,25,351
• Parties: THE KANSAS WHEAT GROWERS ASSOCIATION, Appellant, v. H. J. FLOYD and THE FARMERS STATE BANK OF WICHITA, Appellees. THE KANSAS WHEAT GROWERS ASSOCIATION, Appellant, v. BEN ROBBEN and THE FARMERS STATE BANK OF MOUNT HOPE, Appellees
• Court: Kansas Supreme Court

227 P. 336

116 Kan. 522

THE KANSAS WHEAT GROWERS ASSOCIATION, Appellant, v. H. J. FLOYD and THE FARMERS STATE BANK OF WICHITA, Appellees.

THE KANSAS WHEAT GROWERS ASSOCIATION, Appellant, v. BEN ROBBEN and THE FARMERS STATE BANK OF MOUNT HOPE, Appellees

Nos. 25,350, 25,351

Supreme Court of Kansas

July 5, 1924

Decided July, 1924

Appeal from Sedgwick district court, division No. 3; JESSE D. WALL judge.

Judgment reversed.

SYLLABUS

SYLLABUS BY THE COURT.

1. COOPERATIVE MARKETING CONTRACT--Association Entitled to Restraining Order to Prevent Breach of Contract Made Under R. S. 17-1616. It is error to dissolve a restraining order granted under section 17-1616 of the Revised Statutes and to refuse to grant a temporary injunction to prevent a breach of contract made under the provisions of that section, where it is attempted to show that the contract was procured by fraud but the evidence is not sufficient to establish fraud.

2. SAME--Mortgage on Harvested Wheat Inferior to Rights of Association Under Cooperative Marketing Contract. The rights of a mortgagee of harvested wheat are inferior to the rights of one holding a contract under section 17-1616 of the Revised Statutes, where the mortgagee had knowledge of the contract at the time the mortgage was made.

T. A. Noftzger, George W. Cox, W. J: Masemore, R. L. NeSmith, all of Wichita, and J. B. Larimer, of Topeka, for the appellant.

B. F. Hegler, John W. Adams, William J. Wertz, and George L. Adams, all of Wichita, for the appellees.

OPINION

MARSHALL, J.:

In these actions the plaintiff seeks to obtain permanent injunctions against the defendants under section 17-1616 of the Revised Statutes. In each case a restraining order was issued. Afterward, on applications for temporary injunctions and on motions of the defendants to dissolve the restraining orders, temporary injunctions were denied and the restraining orders were dissolved. From these rulings the plaintiff appeals.

The plaintiff is a cooperative marketing association organized under sections 17-1601 to 17-1625 of the Revised Statutes. Defendants H. J. Floyd and Ben Robben were farmers engaged in growing wheat. They entered into a contract with the plaintiff by which, under certain terms and conditions, they agreed to sell and deliver to the plaintiff all the wheat raised by them as "landlord or lessor" (lessee) during the years 1921, 1922, 1923, 1924 and 1925. The contract contained provisions similar to those set out in Wheat Growers' Association v. Schulte, 113 Kan. 672, 216 P. 311. Floyd, before the contract was signed by him, had given a chattel mortgage to the Farmers State Bank of Wichita on the wheat sown by him in 1921 to secure the payment of money that had been loaned to him to enable him to plant the wheat. That mortgage was not paid, and in 1922 it was renewed to cover the crop of wheat sown by him in the fall of that year. Ben Robben, on May 8, 1923, executed a mortgage to the Farmers State Bank of Mount Hope on the wheat raised by him. The controversy in each of these actions is over the crop that matured in 1923. Each of the defendants was threatening to refuse to deliver to the plaintiff the crop raised by him in 1923. Each of the banks was claiming the right to have the crop mortgaged to it delivered to it under its chattel mortgage.

1. Floyd and Robben each, on the rehearing of the motions, attempted to show that the plaintiff's agents who procured the signatures to the contracts made false representations to Floyd and Robben, which were believed by them, and through which they were induced to sign the contracts. The judgment contains the following:

"The court, having heard the arguments of counsel and being fully advised in the premises, finds that the motion of the defendants to dissolve the restraining order herein should be sustained, and that the application of the plaintiff for a temporary injunction should be denied."

If the evidence introduced were sufficient to show fraud there would be nothing to do but affirm the judgment of the court.

The evidence on the part of Floyd was that the representations made by the agent of the plaintiff were...