Case Information
*1 OFFICE OF Ti-iE ATTORNEY GENERAL OF ‘TEXAS
AUSTIN
: .
'icaorsble C&o. Ii. QSm?parb, Psy, 2
J *3 -
:icnorable Goo. Es. 3lleppax& Psg3 3
%‘h% coEtcn l6 to be dellvemd to the Ass+. CiSEiQn u1thout anj ~rovzslon f3P its Pet;lm;
the Asscclatlon ln auth~rlwd to have fib cottca
baadIed, pmwssed md stored; it is nut'korlzed
to bomov nunsy oa, pool, sad aoil tba cotton;
Ln other woti6, Lb Asaoelatlon 16 authorized to
exerci,se all aota of onmrship cm%2 th.6 cottcn
after Its delivarg, subject only to tae Vii)thud
pmsoribed COP d.eteraFTllag its pice.”
I 17 / lkmorsblo (30. X. Sheppmd, Pajgb 4
A~~oolatlm at the tlse of the Cellrsr7 of hi3 p&aduce and desp1.t~ the fcot that the agreemeAt vlth t!! &3soo5.atlon la ccuchsd in tswa of “salr end delivs;r*3,” the Supreme Co& has held that contrsota of this klzx3 do not involve an “ab- solute sale,” a%d *has said Lbt aots xcerol~ the Asaooiatlon 2.3 a selling. agent sor its ri?erdbeTa. Thus in f3X38 Certified Cottonased areedors’ AJmoclatlcm V. Aldr1dge, 61 3. Y. (2d) ‘79, tb Court said at pp. 824333
WI0 oon8t;ruotioA of this CoAtraot osy be based upon ore oardlnal rule; viz., What VW
t?le Intentian of the partlea thereto vhexl oon-
mw8d in cmneation vith the hiszorg 0r the
class of legislation and the puqmsea sou&xt
to be nttsined? that is the natme of the
title by vhLch an J88OOihtiXl holds proprty’
vhlch it la narkshlsl3 for its hmnbers? To
Vhat CZ’tent do%8 it act in its OVX' Corporate
r:zht aid to w&t extent Is a fZduc%aq cap
city? 9x3 l.At?ultlon of the parties to J con-
treat vlll oontml. If necesaaq?, to g1ob ef-
foot to the Intention of the ptwtier courhl
will brush saida mere foam and e.xaMne the in-
stmrment aa a vhols), in the 1-t 017 the na-
turs and csxoumst8nces of ths tPans~tloll, w1t.b a villv of ascertaining the true int8Atlnu of
the paW.es esFcw%d in the instrumant. Co-
O~eMtivs zlil&rbting a8soaletloAa and t.blr
o_p9ration8 have brought th8l.r share of mzf
groblwm , TPx9y have taken thsFt* place IA the
bua~~ess vorld, rrnd deslox-a, mmf?~~tu~bre,
cr.0 busk~e88 m%n in @A@'- XY wlp;r tb%iP
cca;rrsodditles. The low and t!z% contracts sre- cutad tkemmnder authorize the oraociatian to
rcnrk0k end se11 ‘co ayloultural prcdmtr of
1ta Denlb%r8. The asaoblatlozl IS zads the
tigSAt Of 1:s WSFI~~I'S t0 -S th8fP >FO&IOtS; to borrov nor?q on
it is given the autioritj
the prodzrots and to pledge 8am an aeourit-jy
Sor ails of Ita obllgatlona, It also haa thb
rl$t to diotrlbute the noney so box-ored a8
adva~css equitably among the b--ceders ia ?co-
portion tp tbelr delivery to the assool3tlon, .
J
:
m.noraSle Gee. II. Seapazd, page 5
OS say us4 6iay prt tbreof in it3 busbmss
oper6tioAa. The tlttt.4 of the ccaimcdltlea In
pl.acsd Sa the as8oalatlon to carry out thesfi
yarpor4s. The authority 0an5wred upon t&a
as8ool8tlm Is A4c4saapg for to operata it
erzd function auco4safully~ It ha8 no ss8sta
axcepk the canmoditles dellvwred to it by the
msmbsss of the aaeooiatlcxa. i8 8 AOA- It stock ti nonprofit ooncern, and ltmunt de-
pccnd Solirly for its existonce upon the con-
tmiota tie tith its ambern. '30 acoa@.Lsh
this ad, the I,qs$slotum has announced that
ftuusth8Adls 0Aly th4 psoduota of :tslR4m-
bms, and will not couqttma~ce a dItied a~erv-
ice ‘by potitt* it to h8Adlo th+ produoto
or noAuleIabers.
'The afd of the gwt f"2n*nclsl instl- tl.ltions of tzIt3 country in essential to the
auccesa oi these nsaociations. The sasoaia-
tlonnust have fln6nof3l aasI.stanoe before
It can fonotfon, Fmd the ageA must hsve
paver to pool ?md as11 tba ocasxx3lt~.w it
osfosa SOS sale or plsdgs Sara4 a8 34cur4ty.
30s “si4sa pusperer there 18 no 1lalt8t1cn
65 to the suthosltq conferred upon th0 s3so-
ciotian. Thw Saxxiess 33 a gsoup Som th4
a~soo?atfon, 6ucj sppolnt It to aot 8a thalr
aelmlg qe+nt. TheJ tun OYDS t0 th0 8SSO-
~lntlon thefs coansoditl.es to be pooled zmd
Sold sn the z#rket to tb beat sdvantages.
Sov(~ver, the 0PSicera 0P the ssaoolation
have the oontsolllxq deci~1or.a as to when a?&hov the asle Shall be EL%%. %-I.28 p4l~
nits t.343 assooL3tlcm to glace the oomaodl-
if%8 in iia hands for the cOndf- SSl4 Vhan tlms ore Ssvorable, and arevents a dzq-
kg on the market of commoditisl for vhLch
them la no demand.
'by t% tams OS the oontmat the grov- er hss surm~oxwd control over the o&e of
hi3 grxhct, .Szd t&F&y to this 4Xt4At ha3
pw 6
¶.laportant element of .._ ..m *7 lnten!Aox.iof themmben tocreateat2weco- operative markatZ.ii assooiation, under tlio potters tuuaueralxxl by inu and by tSe cootnatrr, t-2 perfarm certain aervicsa exolusllrelg for its members, and to hold l-3 tao rsos or t Isltentlon that tha delivery of the need co t?ze aosooFation was an absoluco aa30 would aestroo It as A co-oporatin Ixum!Cet~ aasoufation. The menbe~~ hsvs oonrerrttd on this cusoolatlcll, es ttrsitr eelU3lg a@&, such title to the cotton- 3eed vzth ~lwlary povem to handls and bie,pore of aamo, but the sssoal3t’%on barrdIes tlas, pro- coeds theroof for the ‘behsflt of itseU axl its l see sohlBon Y. staple cotton cw-op. mt3a~r a Asa%, 142 ‘mar. 312, 107 so. 2; T~bCbCCO Grim- ers* Cc-o& Ararn ww Sow%, ~185 33. C. 255, Xl7 5. 23. 174 , 33 A. L. R. 231; ~Darpartnne V. ihttsr Ii111 Z'mit iPnr9m' Asr‘n, 122 8%. 138, 119 A. ll61 Phar: Co. v. Ss1e.m F-t Won, Icl3 or. 514, 201 P. 222, 205 P. 970, 25 h. L. 33. 10900; c~hdga~.uv .SBV~~W r0r abma;?3r, 1923, p* 91.# (Xi@aals added)
Sootion 19 of Arc;Zola VIII of our ConsWtuutlnn pro..
vlder 3
“arm produots in tha t?anda Of the prs ,ducer, snd fl3ullly aupplled for hgpe &LJId iparn use, a.ro exempC from all taxatiaz.8 3zM.l othe.r- vlss direated by a two-thirda vote of all tie iaf#d%WB @?b?diOd tQ both hOUB%B Of the L.CQiSbb- turs."
Fl-z?a L.egislaturo ha8 never by e tuc-th%rda vote of all srerPbers imnhcts in the handr 0r OP bid21 hou~fi~ 3.mpo~eds tax on rim the producer, by OUT CoUrta to In vit!in of t5a owst~otlm giV#Zt
arranomento of the tgpe mds~ ~onsldaration, ve feel that t%e p?easlts tivolv9d irt Lao hstsnt qumJtim a.re still *ran% pm- ducts in the hsnde of the producsr~ withIn the me- of the &wre-quoted prorisiorr snd a3 such my not be tcwed. The ob- vious purf;we 0i seeti0n 19 WBB t0 gmv=t ii320dtion th 0r *8 Honorable ~0. H. &sppwd~ ~a~3
3 tax on ,40x-u producta vhen swh tax vould beti dlmmUy upon the producer of such products. This purpose cannot be accompl3.shed if ttuea are levted upon goods held aa ars the peanut-s i.n the instantaituation, for the burdenof such taxes vould inll dirmtly qnm the ~raducem of such goodal. Coneaquently, notuithrt~ th3 faut thst lags1 .tltla to the peanuto Is vsstsd in the corporation mther .tn t&3 pPDdu~~)rs, you are xwspectfully advised that than tha mwmto are r,ot subject to taxation axid your westion ia ivlsversd In the nega?civa.
Wua)tU that tha furegokqx sntisfactor%lp ansY3rs
pour i.lquFrJ, v9 -Peaah
YOUM very truly