cream of the producer; that tests it for the butter fat content upon which the price paid for it is based; and that fixes the price paid for the milk and cream received by it. Before the enactment of the provisions of chapter 239, it was only by litigation by the individual pro- ducer that he could collect what was due him, if he collected at all, when a creamery company refused or failed to pay him for his milk and cream. The unfortunate experiences of producers with creamery companies in these re- spects presented an evil which the Leg- islature sought to correct by this legis- lation.37


Secret Agreements


The dark history of the Craftsbury cream- ery is described in an 1892 decision, McEw- en v. Shannon.38


Farmers met in 1888 to or-


ganize, and in that process needed to “in- duce the farmers in the vicinity to adopt uni- form regulations for producing pure cream by the use of the Cooley creamers, and to patronize a creamery for its manufacture into butter.” The creamery association es- tablished a uniform charge for manufactur- ing cream into butter at four cents a pound. James McEwen owned a big farm and was among the promoters of the creamery. B.P. Shannon was responsible for the operation. Shannon presented the farmers with con- tracts, but McEwen got a better deal, a se- cret agreement, as an inducement. He paid four cents a pound for the processing, but then was paid back three cents a pound by the creamery. The next year, another secret agreement was reached between McEwen and Shannon, where the creamery would buy McEwen’s butter at twenty-five cents a pound. When Shannon refused to pay, McEwen sued.


Chief Justice Jonathan Ross was appalled at the arrangement. He called it “a fraud upon the other patrons of the creamery.”39 McEwen offended the whole point of a co- operative, and his special advantage al- lowed him to avoid sharing the burdens of the operation. The courts will not enforce “secret agreements, nor help either party in regard to them.” Ross was clear: “A con- tract is illegal when it violates good morals, or is opposed to public policy, or is infect- ed with fraud, or violates the provisions of a public statute.”40


Warranties


Stamford farmer Elias K. Carpenter sold 603 pounds of butter for $50.50 in 1860 to a Boston merchant. His crude notation served to prove it. The butter was not us- able when it reached Boston. The buyer had been told it would be of the best qual- ity, “and first class for table use.” The Su-


www.vtbar.org


preme Court found a warranty of quality in the butter, although that was not an explicit term of the contract, and allowed the buy- ers the difference in value, after they sold the butter at a reduced price.41 The Vermont Farm-Machinery Co. pur- chased a separator from Francis Batchel- der & Co. to be installed at its creamery in Plainfield. The bill of sale described the equipment as


one No. 1 U.S. cream separator. com- plete, with belt, one set of balls, one steel step, one set rubber rings, one 6 horse power Dutton vertical engine, or one 6 horse power Watertown hori- zontal engine, all to be placed and set up in the separator station at Plainfield, Vt., and guarantied to do as good work as any other separator in the market, and to skim to one-tenth of one per cent. of fat, or less; the machine to be properly operated.42


At issue was whether the cream separa- tor should be tested at “the ordinary and usual temperature at which milk was sep- arated was from 80° to 90°,” as the com- pany argued.43


Its expert explained that at


that temperature the separator would work just fine, but that the creamery “had insist- ed upon its being tested with the milk at a temperature of from 70° to 72°, and had declined to receive the separator and pay for the same upon the ground that when so tested it would not fulfill the guaran- ty, but was inferior to another separator, known as the ‘No. 1 Alpha.’”44


The pro-


tests of the company notwithstanding, the Court deemed the separator deficient, and awarded judgment to the creamery.


When the subject of the contract is the sale of a machine guaranteed to do as good work as any other like machine in the market, the value of the machine, when compared with other like ma- chines, depends upon whether it can do the same amount and quality of work at the same expense. If it cannot, it does not do as good work, within the meaning intended by the parties, as the other.45


E.B. Bond bought the patent for “S. P. Francisco’s celebrated Atmospheric But- ter Churn” from Jonathan B. Clark in 1854, after Clark made what Bond later charac- terized as “extravagant representations of the superiority of this churn to all oth- ers in use.”46


The churn didn’t work at all,


but Clark refused to return the three hun- dred dollars. Judge Asahel Peck faced the question of whether a circular, advertising the churn, would supply the lack of any ex- press warranty in the contract. The general rule was that it would qualify if both par-


THE VERMONT BAR JOURNAL • WINTER 2013 11


Ruminations: The Legal History of Vermont Butter


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