Oregon Growers' Co-Operative Ass'n v. Riddle

BEAN, J. The decision of this court, written by Mr. Justice Band, in affirming the injunctive decree granted by the Circuit Court for Marion County, in the case of the Oregon Growers’ Co-op. Assn. v. Lentz, supra, necessarily held that the complaint iw that suit, which is substantially like the one in the present suit, is not demurrable. In the Lentz case, at page 587, we find recorded the following: “As the contract in question is not oppressive, unjust or illegal, and its enforcement by mandatory injunction restraining the defendant from selling the products contracted for, to anyone except the plaintiff, will work no injustice or hardship upon the defendant, and as plaintiff is clearly entitled to the relief granted, the decree of the circuit court is affirmed. ’ ’ It is contended in the present case, as it was in the Lentz case, that the marketing agreement lacked mutuality of remedy, that is, the grower could not have specific performance against the association because the duties rested upon the association were in the nature of personal services and, therefore, it was inequitable to grant specific performance at the suit of the association. This question is fully covered in the opinion in the Lentz case at page 583 of the Beport, which reads as follows; *567 • ‘ ‘ This contract, however, could he and was properly enforced by the mandatory injunction of the circuit court which enjoined the defendant from selling any of the log'anberries contracted for to anyone except the plaintiff. The defendant was thus indirectly or negatively required to perforin the obligation of his contract, which, in express terms binds him to sell and deliver to the plaintiff all of the loganberries, grown by or for him upon the nineteen acres of land, which he intends to sell or market up to January 1, 1925. This relief can be enjoyed by the plaintiff only so long as the plaintiff itself performs all of the acts which by the contract, it has agreed to do. The case falls within the rule that ‘where a person is ordered by injunction to perform a negative covenant of that kind, the whole benefit of the injunction is conditioned upon the plaintiff performing his part of the agreement, and the moment he fails to do any of the acts which he engaged to do and which were the consideration for the negative covenant, the injunction would be dissolved.’ Stocker v. Wedderburn, 3 K. & J. 393, 404. See, also, Semidey v. Central Aguirre Co., 239 Fed. 610 (152. C. C. A. 444). Should the plaintiff itself fail to substantially perform the contract- according to its terms, the defendant will thereupon be released from his agreement and upon proper application to the court below the injunction will be dissolved.” Therefore, the main questions involved herein, having been considered and adjudicated in the case mentioned, but little remains to be said in the present case.. It is not contended that the right of the association to equitable relief exists irrespective of any affirmative defenses which the grower may have. In the Lentz case jurisdiction was specifically reserved to the Circuit Court to dissolve the injunction in a supplemental proceeding, in case it should be shown that the association failed to perform its part of the agree *568 ruent. This provision should be kept in mind and enforced in the present case if circumstances require its application. Recent decisions of other courts have sustained the validity of co-operative marketing agreements similar to the one in question in the present case, and have held that the association was entitled in equity to the enforcement of the marketing agreement. See Tobacco Growers’ Co-op. Assn. v. Jones, 185 N. C. 265 (117 S. E. 174, 33 A. L. R. 231); Brown v. Staple Cotton Co-op. Assn., 132 Miss. 859 (96 South. 849); Kansas Wheat Growers’ Assn. v. Schulte, 113 Kan. 672 (216 Pac. 311). The legislature of this state, in order to foster and encourage co-operative associations, by Chapter 260, Gen. Laws of Oregon 1921, p. 486, amended the law relating to such association. Section 6954, Or. L., as so amended, provides in part thus: “The by-laws and marketing contract may fix, as liquidated damages, specific sums to be paid by the member to the association upon the breach by him of any provision of the marketing’ contract regarding the sale or delivery or withholding products; and any such provisions shall be valid and enforceable in the courts of this state. “In the event of any such breach or threatened breach of such marketing contract by a member, the association shall be entitled to an injunction to prevent the further breach of the contract, and to a decree of specific performance thereof. Pending the adjudication of such suit, the association shall be entitled in a proper case to a temporary restraining order or preliminary injunction against the member.” It is contended by defendant that as the time for delivery of fruit under the contract has expired, that an injunction at this time would be useless; that plain *569 tiff’s remedy, if he has any, would be in an action at law, and that the suit should be dismissed. When a court of equity has acquired jurisdiction over some portion of a controversy, it will proceed to decide the whole issue and award complete relief, though'the rights of the parties are strictly legal and the final remedy is of a kind that may be granted by a court at law: Shultz v. Shively, 72 Or. 450 (143 Pac. 1115); Templeton v. Bockler, 73 Or. 494 (144 Pac. 405); O. W. R. & N. Co. v. Reed, 87 Or. 398 (169 Pac. 342, 170 Pac. 300); Phez Co. v. Salem Fruit Union, 103 Or. 514, 545 (201 Pac. 222, 205 Pac. 970, 25 A. L. R. 1090). There are circumstances under which a court of equity will grant compensation in money, ordinarily obtainable at law. One of these cases is where the plaintiff established his equity, but equitable relief is found impracticable: 21 C. J. 143, § 123. The general rule as to the test of jurisdiction of a court of equity is stated thus in 21 C. J., page 145, section 124(c): “Where Equity Fails After Suit Brought. The test of the jurisdiction of a court of equity is whether facts exist at the time of the commencement of the action sufficient to confer jurisdiction on the court. If plaintiff is then entitled to the aid of equity the jurisdiction will not be defeated by subsequent events which render equitable relief unnecessary or improper. This rule is applicable, not only where the relief sought is prevented by act of the defendant, but also where the change of circumstances arises from lapse of time, rendering the specific relief unsuitable or inequitable. * * ” Equitable rights must be both averred and" proved before purely legal rights will be determined by a court of equity. We are to determine at this stage of the case whether jurisdiction should be re *570 taiued for the purpose of assessing’ damages after the cause is tried in case issues shall be raised, only so far as necessary in connection with the ruling upon the demurrer; or, in other words, to determine whether or not the suit should now be dismissed on account of the lapse of time or change of circumstances. It follows that the demurrer in this suit should be overruled. Therefore, the cause will be remanded to the Circuit Court for that purpose and for such further proceeding’s as may be deemed proper. Following the precedent of the Lentz case, no costs will be allowed either party. Beversed. McBride, C. J., and Brown and Belt, JJ., concur.