                                 CODE OF VIRGINIA

MARKETING CONTRACTS; ENFORCEMENT; INDUCING BREACH; SPREADING FALSE REPORTS (§
13.1-329)

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 specified commodities
exclusively to or through the association or any facilities to be created by the
association. The contract may provide that the association may sell or resell
the products delivered by its members, with or without taking title thereto, and
pay over to its members the resale price, after deducting all necessary selling
overhead, and other costs and expenses, including (a) interest or dividends on
its preferred stock, not exceeding eight per centum per annum, (b) reserves for
retiring the stock, if any, (c) other proper reserves, and (d) interest or
dividends not exceeding eight per centum per annum 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 upon
the breach by him of any provision of the marketing contract regarding the sale
or delivery or withholding of products; and may further provide that the member
will pay all costs, premium for bonds, expenses and fees in case any action is
brought upon the contract by the association; and any such provision shall be
valid and enforceable in the courts of this Commonwealth.

c. 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 further breach of the contract, and to a decree of specific performance
thereof. Pending the adjudication of such an action, and upon filing a verified
complaint showing the breach or threatened breach, and upon filing a sufficient
bond, the association shall be entitled to a temporary restraining order and
preliminary injunction against the member.

d. Any person who knowingly induces any member or stockholder of an association
or corporation organized hereunder to breach his marketing contract with the
association or corporation shall be liable to the association or corporation for
the full amount of damages sustained by it by reason of such breach; and any
person who maliciously and knowingly spreads false reports about the finances or
management of any such association or corporation shall be liable to the
association or corporation aggrieved in a civil suit for the actual damage which
it may sustain by reason of such false reports, and also in the penal sum of
$500 for each such act, which may be recovered in the same action.

e. Any person, firm or corporation conducting a public tobacco warehouse within
this Commonwealth who knowingly solicits or permits any member of any
association organized hereunder to breach his marketing contract with the
association by selling, offering for sale, or displaying for sale or for auction
such member&#8217;s products contrary to the terms of any marketing agreement of
which such person or any member of such firm or any active officer or manager of
such corporation has knowledge or notice, shall be liable to the association
aggrieved in a civil suit in the penal sum of not less than $100 nor more than
$500 for each such offense; and such association shall be entitled to an
injunction against such person, firm or corporation, to prevent further breaches
and a multiplicity of actions thereon. In addition, such person, firm or
corporation shall pay to the association a reasonable attorney&#8217;s fee and
all costs involved in any such litigation or proceedings at law. Provided,
however, that no such action or suit by such an association 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 the products of a member of such association
are about to be sold, offered for sale or displayed for sale. Such notice may be
served by any peace officer or any other person, and the affidavit of the person
serving the same shall be prima facie evidence of such service. It shall be the
duty of any police officer, sheriff, deputy sheriff, constable or deputy
constable of this Commonwealth to serve such notice upon request of any
authorized representative of the association, and upon the payment of a fee of
fifty cents for each such service.

HISTORY: Code 1950, §§ 13-278, 13-279; 1956, c. 428.