13.1-329 - Marketing contracts; enforcement; inducing breach; spreading false reports. - Virginia Statutes

§ 13.1-329. Marketing contracts; enforcement; inducing breach; spreadingfalse reports.

(a) An association and its members may make and execute marketing contracts,requiring the members to sell, for any period of time, not over ten years,all or any specified part of their agricultural products or specifiedcommodities exclusively to or through the association or any facilities to becreated by the association. The contract may provide that the association maysell or resell the products delivered by its members, with or without takingtitle thereto, and pay over to its members the resale price, after deductingall necessary selling overhead, and other costs and expenses, including (a)interest or dividends on its preferred stock, not exceeding eight per centumper annum, (b) reserves for retiring the stock, if any, (c) other properreserves, and (d) interest or dividends not exceeding eight per centum perannum upon common stock.

(b) The bylaws and the marketing contract may fix, as liquidated damages,specific sums to be paid by the member or stockholder to the association uponthe breach by him of any provision of the marketing contract regarding thesale or delivery or withholding of products; and may further provide that themember will pay all costs, premium for bonds, expenses and fees in case anyaction is brought upon the contract by the association; and any suchprovision shall be valid and enforceable in the courts of this Commonwealth.

(c) In the event of any such breach or threatened breach of such marketingcontract by a member, the association shall be entitled to an injunction toprevent further breach of the contract, and to a decree of specificperformance thereof. Pending the adjudication of such an action, and uponfiling a verified complaint showing the breach or threatened breach, and uponfiling a sufficient bond, the association shall be entitled to a temporaryrestraining order and preliminary injunction against the member.

(d) Any person who knowingly induces any member or stockholder of anassociation or corporation organized hereunder to breach his marketingcontract with the association or corporation shall be liable to theassociation or corporation for the full amount of damages sustained by it byreason of such breach; and any person who maliciously and knowingly spreadsfalse reports about the finances or management of any such association orcorporation shall be liable to the association or corporation aggrieved in acivil suit for the actual damage which it may sustain by reason of such falsereports, and also in the penal sum of $500 for each such act, which may berecovered in the same action.

(e) Any person, firm or corporation conducting a public tobacco warehousewithin this Commonwealth who knowingly solicits or permits any member of anyassociation organized hereunder to breach his marketing contract with theassociation by selling, offering for sale, or displaying for sale or forauction such member's products contrary to the terms of any marketingagreement of which such person or any member of such firm or any activeofficer or manager of such corporation has knowledge or notice, shall beliable to the association aggrieved in a civil suit in the penal sum of notless than $100 nor more than $500 for each such offense; and such associationshall be entitled to an injunction against such person, firm or corporation,to prevent further breaches and a multiplicity of actions thereon. Inaddition, such person, firm or corporation shall pay to the association areasonable attorney's fee and all costs involved in any such litigation orproceedings at law. Provided, however, that no such action or suit by such anassociation shall lie unless there has been first served upon such person,firm or corporation after such tobacco has been delivered to the warehouse,and prior to the sale thereof, a notice, in writing, stating that theproducts of a member of such association are about to be sold, offered forsale or displayed for sale. Such notice may be served by any peace officer orany other person, and the affidavit of the person serving the same shall beprima facie evidence of such service. It shall be the duty of any policeofficer, sheriff, deputy sheriff, constable or deputy constable of thisCommonwealth to serve such notice upon request of any authorizedrepresentative of the association, and upon the payment of a fee of fiftycents for each such service.

(Code 1950, §§ 13-278, 13-279; 1956, c. 428.)