are hereby, legalized and declared valid notwithstanding any errors, clerical or otherwise, or any omission on the part of said Board of Trustees of said Town or of other municipal officers or others acting under the direction of said Board in the proceedings incident to the issuance of said bonds.

Section 2. That all bonds issued or to be issued by the said Town of Wall, Pennington County, South Dakota, through its Board of Trustees for the purpose mentioned in the preceding section and which are referred to in the Petition filed and the Resolution passed by the said Board on the 7th day of August, 1922, and voted upon at the election held in the said Town of Wall on the 22nd day of August, 1922, be, and the same are hereby, legalized and declared valid.

Section 3. Whereas, this Act is necessary for the immediate support of the State Government and its existing public institutons, an emergency is hereby declared to exist and this Act shall be in full force and effect from and after its passage and approval.

Approved February 17, 1923.

Agriculture

CHAPTER 15.

(S. B. 138.)

RELATING TO THE MARKETING OF AGRICULTURAL PRODUCTS

AN ACT Entitled, An Act to Promote, Foster and Encourage the Intelligent and Orderly Marketing of Agricultural Products Through Co-operation and to Eliminate Speculation and Waste; and to Make the Distribution of Agricultural Products as Directly as Can Be Efficiently Done Between Producer and Consumer; to Stabilize the Marketing Problems of Agricultural Products and to Supply Its Members Necessary Equipment, and to Provide for the Formation of Corporations to Carry Out the Purposes of This Act.

Be It Enacted by the Legislature of the State of South Dakota :

Section 1. Definitions As Used in This Act. (a) The term "agricultural products" shall include horticultural, forestry, dairy, livestock, poultry, beef and other farm products.

(b) The term "member" shall include actual members of associations without capital stock and holders of common stock in associations organized with capital stock.

(c) The term "association" means any corporation organized under this act; and

(d) The term "person" shall include individuals, firms, partnerships, corporations and associations.

Associations organized hereunder shall be deemed non-profit, inasmuch as they are not organized to make profits for themselves, as such, or for their members, as such, but only for their member as producers. This Act shall be referred to as the "Cooperative Marketing Act."

Section 2. Who May Organize. Five or more persons engaged in the production of agricultural products may form a non-profit cooperative

association with or without capital stock, under the provisions of this act.

Section 3. Purposes. An association may be organized to engage in any activity in connection with the marketing or selling of the agricultural products of its members or with the harvesting, preserving, drying, processing, canning, packing, storing, handling, shipping, or utilization thereof, or the manufacturing or marketing of the by-products thereof; or in connection with the manufacturing, selling or supplying to its members of machinery, equipment or supplies, or the financing of the above enumerated activities; or in any one or more of the activities specified herein.

Section 4. Preliminary Investigation. The Commissioner of Agriculture shall, upon request by any group of persons contemplating the organization of an association under this act, furnish to them the best available information as to methods of organization and possibilities of success, and shall, when requested to do so, make needed surveys of the marketing conditions affecting such commodities in so far as the personnel of his department makes such assistance possible.

Section 5. Powers. Each association incorporated under this act shall have the following powers:

(a) To engage in any activity in connection with the marketing, selling, harvesting, preserving, drying, processing, canning, packing, storing, handling or utilization of any agricultural products produced or delivered to it by its members; or the manufacturing or marketing of the by-products thereof; or in connection with the purchase, hiring or use by its members of supplies, machinery or equipment; or in the financing of any such activities; or in any one or more of the activities specified in this section. No association, however, shall handle the agricultural products of any non-member.

(b) To borrow money and to make advances to members.

(c) To act as the agent or representative of any member or members in any of the above mentioned activities.

(d) To purchase, or otherwise acquire and to hold, own, and exercise all rights, of ownership in and to seell, transfer, or pledge shares of capital stock or bonds of any corporation or association engaged in any related activity or in the handling or marketing of any of the products handled by the association.

(e) To establish reserves and to invest the funds thereof in bonds or such other property as may be provided in the by-laws.

(f) To buy, hold, and exercise all privileges of ownership, over such real or personal property as may be necessary or convenient for the conduct and operation of any of the business of the association or incidental thereto.

(g) To do each any everything necessary, suitable, or proper for the accomplishment of any one of the purposes or the attainment of any one or more of the objects herein enumerated or conducive to or expedient for the interest or benefit of the association; and to contract accordingly; and in addition to exercise and possess all powers, rights and privileges necessary or incidental to the purposes for which the association is organized or to the activities in which it is engaged; and in addition any other rights, powers, and privileges granted by the laws of this state to ordinary corporations, except such as are inconsistent with the express provisions of this act, and to do any such thing anywhere.

Section 6. Members. (a) Under the terms and conditions prescribed in its by-laws, an association may admit as members, or issue common stock, only to persons engaged in the production of the agricul

tural products to be handled by or through the association, including the lessees and tenants of land used for the production of such products and any lessors and landlords who receive as rent part of the crop raised on the leased premises.

(b) If a member of a non-stock association be other than a natural person, such member may be represented by any individual, associate, officer or member thereof duly authorized in writing.

(c) Any association organized hereunder may become a member or stockholder of any other association or associations, organized hereunder. Section 7. Articles of Incorporation. Each association formed under this act must prepare and file articles of incorporation, setting forth: (a) The name of the association;

(b) The purpose for which it is formed;

(c) The place where its principal business will be transacted;
(d) The term for which it is to exist, not exceeding forty years;

(e) The number of its directors or trustees, which shall not be less than five nor more than thirteen, and the names and residences of those who are appointed for the first three months and until their successors are elected and qualified.

(f) If organized without capital stock, whether the property rights and interest of each member shall be equal or unequal; and if unequal, the articles shall set forth the general rule or rules applicable to all members by which the property rights and interests, respectively, of each member may and shall be determined and fixed and the association shall have the power to admit new members who shall be entitled to share in the property of the association with the old members, in accordance with such general rule or rules. This provision of the articles of incorporation shall not be altered, amended or repealed except by written consent or vote of three-fourths of the members.

(g) The articles must be subscribed by the incorporators and acknowledged by one of them before an officer authorized by the laws of this state to take and certify acknowledgments of deeds and conveyances; and shall be filed in accordance with the provisions of the general corporation law of this state, and when so filed the said articles of incorporation, or certified copies thereof, shall be received in all the courts of this state, and other places, as prima facie evidence of the facts. contained therein, and of the due incorporation of such association.

Section 8. Amendments to Articles of Incorporation. The articles of incorporation may be altered or amended at any regular meeting or at any special meeting called for that purpose. An amendment must first be approved by two-thirds of the directors and then adopted by a vote representing a majority of all the members of the association. Amendments to the articles of incorporation when so adopted shall be filed in accordance with the provisions of the general corporation law of this state.

Section 9. By-Laws. Each association incorporated under this act must, within thirty days after its incorporation, adopt for its government and management a code of by-laws, not inconsistent with the powers granted by this act. A majority vote of the members or stockholders, or their written assent is necessary to adopt such by-laws.

Each association under its by-laws shall also provide for:

(a) The time, place, and manner of calling general and special meetings.

(b) The number of stockholders or members constituting a quorum. (c) The method of electing directors and officers.

(d) The number of directors constituting a quorum.

(e) The qualifications, compensation and duties and term of office

of directors and officers; time of their election and the mode and manner of giving notice thereof.

(f) The qualifications of members or stockholders of the association and the conditions precedent to membership or ownership of common stock, the method, time and manner of permitting members to withdraw or the holders of common stock to transfer their stock; the manner of assignment and transfer of the interest of members, and the shares of common stock; the conditions upon which, and the time when membership of any member shall cease. The automatic suspension of the rights of a member when he ceases to be eligible to membership in the association, and mode, manner and effect of the expulsion of a member; manner of determining the value of a member's interest and provision for its purchase by the association upon the death or withdrawal of a member or stockholder or upon the expulsion of a member or forfeiture of his membership, or at the option of the association, by conclusive appraisal by the board of directors.

Optional Provisions.

Each association under its by-laws

may also provide for any of the following matters:

(a) The right of members or stockholders to vote by proxy or by mail or by both, and the conditions, manner, form and effects of such votes.

(b) Penalties for violations of the by-laws.

(c) The amount of entrance, organization and membership fees, if any; the manner and method of collection of the same and the purposes for which they may be used.

(d) The amount which each member or stockholder shall be required to pay annually or from time to time, if at all, to carry on the business of the association, the charge, if any, to be paid by each member or stock. holder for services rendered by the association to him and the time of payment and the manner of collection; and the marketing contract between the association and its members or stockholders which every member or stockholder may be required to sign.

Section 10. General and Special Meetings-How Called. In its bylaws each association shall provide for one or more regular meetings annually. The board of directors shall have the right to call a special meeting at any time and ten per cent of the members or stockholders may file a petition stating the specific business to be brought before the association and demand a special meeting at any time. Such meetings must thereupon be called by the directors. Notice of all meetings, together with a statement of the purposes thereof, shall be mailed to each member at least ten days prior to the meeting; provided, however, that the by-laws may require instead that such notice may be given by publication in a newspaper of general circulation, published at the principal place of business of the association.

Section 11. Directors-Election. The affairs of the association shall be managed by a board of not less than five directors, elected by the members or stockholders from their own number. The by-laws may provide that the territory in which the association has members shall be divided into districts and that the directors shall be elected according to such districts. In such a case the by-laws may provide that primary elections should be held in each district to elect the directors apportioned to such districts and the result of all such primary elections must be ratified by the next regular meeting of the association.

An association may provide a fair remuneration for the time actually spent by its officers and directors in its service. No director, during the term of his office, shall be a party to a contract for profit with the asso

ciation, differing in any way from the business relations accorded regular members or holders of common stock of the association.

When a vacancy on the board of the directors occurs, other than by expiration of term, the remaining members of the board, by a majority vote, shall fill the vacancy, unless the by-laws provide for an election of directors by district.

In such case the board of directors shall immediately call a special meeting of the members or stockholders in that district to fill the

vacancy.

Section 12. Election of Officers. The directors shall elect from their number a president and one or more vice-presidents. They shall also elect a secretary and treasurer who need not be directors and they may combine the two latter offices and designate the combined office as secretarytreasurer. The treasurer may be a bank or any depository, and as such shall not be considered as an officer, but as a function of the board of directors. In such case the secretary shall perform the usual accounting duties of the treasurer, excepting that the funds shall be deposited only as authorized by the board of directors.

Section 13. Stock-Membership Certificates-When Issued-Voting -Liability-Limitation on Transfer and Ownership. When a member of an association established without capital stock, has paid his membership fee in full, he shall receive a certificate of membership. No association shall issue stock to a member until it has been fully paid for. The promissory notes of the members may be accepted by the association as full or partial payment. The association shall hold the stock as security for the payment of the note, but such retention as security shall not affect the members' right to vote. Except for debts lawfully contracted between him and the association, no member shall be liable for the debts of the association to an amount exceeding the sum remaining unpaid on his membership fee or his subscription to the capital stock, including any unpaid balance or any promissory notes given in payment thereof.

No stockholder of a cooperative association shall own more than onetwentieth of the issued common stock of the association; and an association, in its by-laws, may limit the amount of common stock which one member may own to any amount less than one-twentieth of the issued common stock.

No member or stockholder shall be entitled to more than one vote.

The by-laws shall prohibit the transfer of the common stock of the association to persons not engaged in the production of the agricultural products handled by the association, and such restrictions must be printed upon every certificate of stock subject thereto. The association may at any time, except when the debt of the association exceeds fifty per cent of the assets thereof, buy in or purchase its common stock at book value thereof as conclusively determined by the board of directors and pay for it in cash within one year thereafter.

Section 14. Removal of Officer or Director. Any member may bring charges against an officer or director by filing them in writing with the secretary of the association, together with a petition signed by ten per cent of the members, requesting the removal of the officer or director in question. The removal shall be voted upon at the next regular or special meeting of the association, and by a vote of a majority of the members, the association may remove the officer or director and fill the vacancy. The director or the officer against whom such charges have been brought shall be informed in writing of the charges previous to the meeting and shall have an opportunity at the