OFFICE OF Ti-iE ATTORNEY GENERAL OF ‘TEXAS
AUSTIN
: .
'icaorsble C&o. Ii. QSm?parb, Psy, 2
J
-
16
:icnorableGoo. 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%2th.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 the Asaooiatlon aots xcerol~
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 017the 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 , TPx9yhave taken thsFt* place IA the
bua~~ess vorld, rrnd deslox-a, mmf?~~tu~bre,
cr.0 busk~e88 m%nin @A@'- XY wlp;r tb%iP
cca;rrsodditles. The low and t!z%contracts sre-
cutad tkemmnder authorize the oraociatian to
rcnrk0kend se11 ‘co ayloultural prcdmtr of
1ta Denlb%r8. The asaoblatlozlIS zads the
tigSAt Of 1:s WSFI~~I'St0 -S th8fP >FO&IOtS;
it is given the autioritj to borrov nor?q on
the prodzrots and to pledge 8am an aeourit-jy
Sor ails of Ita obllgatlona, It also haa thb
rl$t to diotrlbute the noney so box-ored a8
adva~css equitably among the b--cedersia ?co-
portion tp tbelr delivery to the assool3tlon,
.
J
18
:
m.noraSle Gee. II. Seapazd, page 5
OS say us4 6iay prt tbreof in it3 busbmss
oper6tioAa. The tlttt.4of the ccaimcdltlea In
pl.acsd Sa the as8oalatlon to carry out thesfi
yarpor4s. The authority 0an5wred upon t&a
as8ool8tlm Is A4c4saapg for it to operata
erzd function auco4safully~ It ha8 no ss8sta
axcepk the canmoditles dellvwred to it by the
msmbsss of the aaeooiatlcxa. It i8 8 AOA-
stock ti nonprofit ooncern, and ltmunt de-
pccndSolirly for its existonce upon the con-
tmiota tie tith its ambern. '30 acoa@.Lsh
this ad, the I,qs$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 tzIt3country 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 ?mdas11 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.aas to when
a?&hov the asle Shall be EL%%. %-I.28p4l~
nits t.343assooL3tlcm to glace the oomaodl-
if%8 in iia hands for SSl4 Vhan the cOndf-
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
..m of
20
lnten!Aox.iof themmben tocreateat2weco-
operative markatZ.ii assooiation, under tlio
potters tuuaueralxxlby 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
mt3a ~r a l see sohlBon Y. staple cotton cw-op.
Asa%, 142 ‘mar. 312, 107 so. 2; T~bCbCCO Grim-
ers* Cc-o& Ararn ww Sow%, ~18533. 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.mF-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?andaOf the prs
,ducer, snd fl3ullly aupplled for hgpe &LJIdiparn
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
OP bid21 hou~fi~ 3.mpo~eds tax on rim imnhcts in the handr 0r
the producer,
In vit!in of t5a owst~otlm giV#Zt by OUT CoUrta to
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 th ii320dtion 0r
Honorable ~0. H. &sppwd~ ~a~3 8
3 tax on ,40x-uproducta vhen swh tax vould beti dlmmUy
upon the producer of such products. This purpose cannot
be accompl3.shedif 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
than .tn t&3 pPDdu~~)rs, you are xwspectfully advised that
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