Nelson v. Guaranty Trust Co.

K. Lane Johnson, bankrupt, was engaged in a general fruit business in the state of Washington, particularly in the Kennewick district. He bought and sold fruit; dealt in growers’ supplies; marketed crops on straight consignment; marketed fruit under the plan known as pooling; crated, packed, and stored fruit for market; owned and operated fruit farms. He financed growers, and a large part of his business was borrowing money and buying supplies on credit to advance to growers with the understanding that their fruit, when matured, would be delivered to him to be handled either on a factorage basis or under an agreement giving him power to elect to market all fruit so delivered under the pooling plan. The basic principle of this pooling plan is identical with that of co-operative marketing. Under such plan the-fruit received by Johnson was commingled and marketed during the season, with an agreement to pay the growers on the basis of the average market price o-n fruit so handled by him during the year.

Appellants, Nelson and Kaas, were fruit growers. Each had a contract with Johnson providing for marketing his crops under the pooling plan. Nelson’s contract was in writing, and Kaas’…