Piru Citrus Assn. v. Williams

VALLÉE, J.

Appeal by defendants from an order granting a new trial in an action for liquidated damages for breach of a cooperative marketing agreement.

The cause was tried by a jury which rendered a verdict for defendants. Thereafter, upon motion of plaintiff, the court made the following order granting a new trial:

“In 1947 the defendants, husband and wife, purchased a citrus ranch in the vicinity of Pirn in Ventura County. They also purchased 289 shares of the capital stock of the plaintiff. Plaintiff is a cooperative marketing association.

“Prior to the purchase of the stock, defendants’ predecessor owner of the property had been a shareholder in the plaintiff Association and had delivered his fruit to the Association as such shareholder.

“The stock purchase was represented by defendant, Clyde Williams, signing an original copy of the bylaws and a promissory note for a balance of $430.00 due upon the stock by the former owner of the real property. This was January 4, 1947. The stock certificate was issued on the same day and was retained by the Association as collateral security for the payment of the note.

“The defendant testified that he did not read either the note or the bylaws, and that at the time he signed them he stated to the gentleman who prepared the documents for the Association, ‘You are not going to handle this fruit.’ He further testified that the reason he signed the bylaws and the note was that he wanted to salvage something out of the stock but that otherwise he had no use for it.

“Shortly after the stock was purchased, defendant caused a letter to be written to the Association by his attorney advising the Association to stay off the property. No service was rendered by the Association, and no crops were taken off the property by the Association.

“On December 27, 1947, the defendant paid the balance due on the promissory note and the certificate of stock was delivered to him by the Association.

‘ ‘ The bylaws of the Association provide that no person who does not own citrus acreage may own stock; each shareholder

[914]

agrees to deliver all marketable citrus fruit to the Association grown and matured upon his land, and the Association is empowered to pick, handle and market the crops. After sale of the fruit, the shareholder receives his pro-rata part of. the proceeds of sale less costs of picking, processing and marketing. Liquidated damages at the rate of 25 cents per picked box are fixed, in the event of failure on the part of the shareholder to deliver fruit in accordance with the bylaws.