Poultry Producers of Central California, Inc. v. Murphy

The plaintiff is a nonprofit association of poultry producers, organized for the purpose of promoting and fostering the business of raising poultry and marketing eggs and poultry by co-operative methods. The defendant, together with other producers of poultry products, signed a subscription agreement which provided for the organization of a corporation under which each producer agreed to purchase stock on the basis of one share for each 1,000 hens owned by the subscriber; the agreement further provided that the corporation (plaintiff herein) have an option to repurchase its stock; that the corporation should be organized upon the securing of subscriptions in a certain amount; and it also made provision for the number of directors, the manner of their selection,. and various other matters usually contained in such a subscription agreement.

The defendant, owning about 1,000 hens, subscribed for one share of stock at the time he signed the subscription agreement, and paid $2.50, representing twenty-five per cent of the subscription price, which, in accordance with the terms of the subscription agreement, was to be credited for the stock if the organization was completed.

To the…