Chap. 408.—An ACT to amend and re-enact Sections 1257, 1258, 1260, 1261,
1263, 1264, and 1265 of the Code of Virginia as heretofore amended, relating
to licensing, bonding, and regulating commission merchants. [S B 256]

Approved April 1, 1938

1. Be it enacted by the General Assembly of Virginia, That sec-
tions twelve hundred and fifty-seven, twelve hundred and fifty-eight,
twelve hundred and sixty, twelve hundred and sixty-one, twelve hun-
dred and sixty-three, twelve hundred and sixty-four, and twelve hun-
dred and sixty-five of the Code of Virginia, as heretofore amended, be
amended and re-enacted so as to read as follows:

Section 1257. Definitions—-Whenever used in this section or in
sections twelve hundred and fifty-eight to twelve hundred and sixty-
five, both inclusive: ,

The term “person” shall mean and include an individual person,
firm, partnership, corporation, association, or syndicate, their lessees,
trustees, or receivers.

The term “commission merchant” shall mean any person, as herein
defined, who conducts or operates an auction market, as herein defined.
or who shall receive farm products for sale on commission, or con-
tract with the producer thereof for farm products to be sold on com-
mission, or accept in trust from the producer thereof for the purpose
of sale, or who shall sell or offer for sale on commission, or shall
solicit consignments of any kind of farm products, or who shall ir
any way handle for the account of or as an agent of the produce:
thereof any kind of farm products; provided, that any person shal
be deemed to be an agent of the producer, unless a specific pric
has been agreed upon by both parties before shipment or delivery by
the producer for resale.

The term “commission merchant” shall not include any cooperative
corporation or association organized under or that has adopted the
provisions of or domesticated in Virginia pursuant to the provision:
of chapter forty-eight of the Acts of the General Assembly, nine.
teen hundred and twenty-two, as amended, otherwise known as _ the
“cooperative marketing” act, so long as said corporation or associatior
meets the requirements of and operates in accordance with the pro-
visions of the said act and acts amendatory thereof; nor shall i
include any association or organization of farmers, including produce
exchanges, not incorporated under or subject to the provisions of the
said “cooperative marketing” act, organized and maintained by farm-
ers for mutual help in the marketing of their produce and not fot
profit; nor any person, buying vegetables viticultural and/or horticul-
tural farm products for the purpose of reselling the same in dried
canned or other preserved form; nor shall it include the sale of farm
produce at public auction by a duly licensed auctioneer, acting as the
agent of another to whom such farm produce shall have been con-
signed; nor to the sale by sheriffs, constables and other officers and
fiduciaries and court officials; nor to seed sold at retail.

The term “auction market” shall be construed to be the same as
“livestock auction market”, “livestock sales ring”, “livestock auction”,
or “livestock auction ring’, and means a place or establishment con-
ducted or operated for compensation or profit as a private or public
market, consisting of pens, or other enclosures, whether covered or
uncovered, and their appurtenances, in which livestock are received,
held or kept for sale or where livestock is sold or offered for sale
either privately or at public auction, except, the provisions of this
act shall not apply to (one) the premises of any butcher, packer or
processor who receives livestock exclusively for immediate slaughter,
(two) farm sales, (three) sales by four-H clubs or (four) sales by
livestock breeders’ associations or by exposition societies.

he term “commissioner” means the Commissioner of Agricul-
ture and Immigration.

The term “licensee” means any person, as herein defined, who has
applied for or been granted license to operate, conduct, or carry on
the business of a commission merchant.

The term “farm produce” or “farm products” shall mean and in-
clude horticultural, viticultural, forestry, dairy, livestock, poultry, bee
and other products ordinarily produced on farms.

Section 1258. Application for License—It shall be unlawful for
any person to act, as, operate, or carry on the business of a commission
merchant without first obtaining a license as herein provided. Appli-
cation for license hereunder shall be made to the commissioner in
writing, signed and sworn to by the applicant. Said application shall
state the name of city or town where the business of commission mer-
chant is to be conducted, the street and number of the building if
practicable, the character of the products which will be handled by
the applicant; and if made by a co-partnership, the full names of each
of the partners comprising the co-partnership, and their respective
addresses, together with the firm or trade name under which the
business is to be conducted; and if made by a corporation the appli-
cation shall state whether domestic or foreign, the amount of its capi-
tal stock, as provided in its articles of incorporation, the amount of its
capital stock fully paid in, and the names of its officers, together with the
name or names of such person or persons authorized to receive and
accept service of summons and legal notices of all kinds for the appli-
cant. Such applicants shall further satisfy, upon demand, the com-
missioner of his or its character, responsibility and good faith in
seeking to carry on a commission merchant’s business within this
State.

All applications shall be accompanied by a license fee of ten
($10.00) dollars, and a good and sufficient bond in the sum of three
thousand ($3,000.00) dollars, when the average daily gross commission
business is five thousand ($5,000.00) dollars or less, with one thous-
and ($1,000.00) dollars added to the bond for each additional five
thousand ($5,000.00) dollars average daily gross commission business
done for previous year with maximum bond of ten thousand ($10,-
000.00) dollars, which entitles the applicant to license to expire on
December thirty-first, next following. Upon the application accom-
panied by evidence of payment of renewal premium continuing the
bond herein required in full force and effect, and the payment of a
fee of ten ($10.00) dollars on or before the first day of January
following the date of expiration of any license hereunder issued the
applicant shall be entitled to renewal license to expire one year from
the date of expiration of the old license. All applications for renewal
licenses shall be made in the same manner as application for original
license. All sums received by the commissioner for such license fees
shall be paid into the State treasury to be appropriated solely for the
purpose of carrying out the provisions of this law.

Section 1260. Powers of the Commissioner.—For the purpose of
enforcing the provisions of this law, the commissioner, upon the veri-
fied complaint of any interested party shall, or upon his own motion
may, either personally or through his duly authorized agent or agents
investigate any transaction involving solicitation, receipt, sale or at-
tempted sale of farm products by any person or persons acting or
assuming to act, or attempting to act, as a commission merchant,
failure of any commission merchant to make proper and true account
of sales and settlement thereof as in this act required, any transaction
wherein produce consigned to a commission merchant is disposed of
to a person, firm or corporation composed substantially of the same
persons, as stockholders, members, or otherwise, who compose the
commission merchant; the intentional making by any commission mer-
chant of false statements as to condition, grade, and/or quality of
any farm products received or in storage; the intentional making by
any commission merchant of false statements as to market condition:
the failure of any commission merchant to make payment for farm
products within the time required by this law; or to any other inju-
rious transaction arising out of the sale of farm produce on commission.

When a consignor of farm products to a commission merchant
shall have filed a complaint with the said commission merchant within
ninety days after date of sale, and shall have failed to obtain a satis-
factory settlement thereof within ten days after the filing of the said
complaint, a verified complaint setting forth the above facts may be
filed with the commissioner, who shall personally or through his duly
authorized agent or agents, thereupon undertake to effect settlement
of the matter involved. If the said commissioner or his agent or
agents, within a reasonable time, be unable to effect settlement to the
satisfaction of the parties involved, he or his agent or agents shall,
aiter giving said parties at least five days’ notice as to time and place,
which shall be in the city or town in which is situated the place of
business of the commission merchant or in which the transaction com-
plained of occurred, proceed to hear evidence concerning the matter
involved, and thereafter either dismiss the complaint or enter such
order against the commission merchant as the said commissioner shall
deem proper to afford the consignor relief. Any such order shall
be complied with within the time specified therein; provided, however,
such period of time shall not be less than five days.

In furtherance of any such investigation, inspection or hearing the
commissioner, or his duly authorized agent or agents, shall have full
authority to make any and all necessary investigations relative to the
said complaint or matter being investigated, and they shall have at all
times free and unimpeded access to all buildings, yards, warehouses,
storage and transportation facilities in which any farm products are
kept, stored, handled, or transported. They shall have full authority
to administer oaths and take testimony thereunder, to issue subpoenas
requiring the attendance of witnesses before him or his agents, together
with all books, memoranda, papers, and other documents, articles or
instruments; to compel the disclosure by such witnesses of all facts
known to them relative to the matters under investigation; and all
parties disobeying the orders or subpoenas of the said commissioner
or his duly authorized agent or agents, shall be guilty of contempt and
shall be certified to any court of competent jurisdiction for punish-
ment for such contempt. Copies of all records, inspection certificates,
certified reports and all papers on file in the office of the commissioner
shall be prima facie evidence of the matter contained.

Section 1261. Granting Licenses, Posting Same, or a Certified
Copy Thereof, and Revocation—The commissioner may refuse to
grant a license, or may revoke any license already granted, as the case
may be, when he shall be satisfied of the existence of any of the
following causes:

(a) Where a money judgment has been entered against such
commission merchant and upon which execution has been returned
unsatisfied.

(b) Where false, fraudulent or improper charges or returns have
been made by the licensee, for the handling, sale or storage of, or
for rendering of any service in connection therewith.

(c) Where the licensee has failed or refused to render a true
account of sales, or to make settlement thereon promptly and within
the time and in the manner required by this law.

(d) Where the licensee has knowingly made false or misleading
statements as to the grade, condition, quality or quantity of farm
products received, handled, stored or held by him for sale on com-
mission.

(e) Where the licensee has made false or misleading statements
as to market conditions, with intent to deceive.

({) Where there has been combination or combinations to fix
prices, or where the licensee has, directly or indirectly, purchased for
his, or its own account farm products received by him or it, upon
consignment, without prior authority from consignor in writing and
at a price agreed to, fixed by the consignor; provided, however, that
this shall not apply to livestock auction markets nor to tobacco ware-
housemen, when the consignor or owner is present in person at the
sale of his livestock or tobacco, or represented by a duly authorized
agent.

(g) Where the licensee has made fictitious sales or has been
guilty of collusion to defraud the consignor.

(h) Where the licensee, to whom any farm products have been
consigned, reconsigned such farm products to another person, either
in the city or town in which is located the licensee, or to some other
point within or without the State of Virginia, unless consent of the
consignor has been first obtained and in writing, or notice given in
writing to the consignor by the consignee that all or a part of such
shipment was reconsigned.

(i) Where the licensee sells farm products consigned to him or
it, to another person, owned or controlled by him or it, or in which
such licensee may be interested financially or otherwise, either directly
or indirectly, unless notice is given, in writing, to the consignor by
the licensee that all or a part of such shipment was sold to a person in
which he or it is financially interested.

(j) Where the licensee was intentionally guilty of fraud or decep-
tion in the procurement of such license.

(k) Where the licensee has failed or refused to file with the
commissioner a schedule of his maximum commissions and other
charges for services in connection with the produce handled on ac-
count of or as agent of another as prescribed in this act, prior to the
first day of February of each year.

When the licensee has failed or refused to obey and comply with
any order of the commissioner entered pursuant to the provisions of
section twelve hundred and sixty of the Code, as amended, within
the time specified in said order, or in case an appeal is taken from
such action of the said commissioner, then within ten days from the
time such order became final.

(1) Where a license shall have been revoked, thie commissioner
shall cause to be published in one or more daily papers to be selected
by him, once a week for two successive weeks, the fact of such revo-
cation and the cause therefor, and also in the next issue of the Agri-
cultural Bulletin issued by the said commissioner.

A certified copy of an issued license may be procured by the holder
of the original upon payment of a fee of one ($1.00) dollar therefor,
and the original or a certified copy of said license shall be posted dur-
ing sale periods in a conspicuous place on the premises where the
business is conducted.

Section 1263. Report of Sale to Consignor: Keeping of Records,
Et Cetera.—It shall be the duty of every commission merchant, having
received any farm products for sale on commission, to promptly make
and keep a correct record, showing in detail, the following with refer-
ence to the handling, sale, or storage of such farm products:

(a) The name and address of the consignor ;

(b) The date received ;

(c) The condition, grade and quantity on arrival;

(d) The date of such sale for the account of the consignor ;
(e) The price for which sold;

(f£) An itemized statement of the charges to be paid by the
consignor in connection with the sale;

(g) Each consignment of farm products shall be given a lot
number or other identifying mark, which number or mark shall ap-
pear on all sales tags or tickets and /or on any other essential records
needed to show what the products actually sold for;

(h) <A detailed statement shall be kept on File of the filing of
any claim or claims which have or may be filed by the commission
merchant against any person for over-charges or for damages result-
ing from the injury or deterioration of such farm products by the
act or acts, or neglect, or failure of such person, and such records shall
be open to the inspection of the commissioner and the consignor or
consignors of farm products for whom such claim or claims are
made; provided that the money returns, if any, collections, or dam-
ages received by said commission merchant from said person for
and on behalf of consignor or consignors of farm products by reason
of said overcharges, damages, deterioration shall forthwith be paid
to the aforesaid consignor or consignors of farm products, less charges
for collection thereof, in accordance with the schedule of charges filed
under section twelve hundred and fifty-nine of this act. A copy of
the record and account of sales of farm products, together with
remittances in full of the amount realized by such sales, less the
agreed commissions and other charges, shall be delivered to the con-
signor upon the consummation of the sale together with all monies
received by him in payment for any consignment of farm products,
less the agreed commission and other charges, within ten days after
receipt of said monies by said commission merchant, unless otherwise
agreed in writing; provided, however, that the names and addresses
of purchasers need not be given unless demanded in cases of com-
plaint.

It shall also be the duty of every commission merchant to retain
a copy of all records, including sales tags or tickets, account of sales,
and other records covering each transaction, for a period of one
hundred and twenty days from the date thereof, which copy shall
at all times be available for, and open to, the confidential inspection
of the commissioner, or his duly authorized agents, and the interested
consignor, or any authorized representative of either. In the event
of any dispute or disagreement between a consignor and a commis-
sion merchant arising at the time of delivery as to condition, quality,
grade, pack, quantity or weight of any lot, shipment or consignment
of farm products, it shall be the duty of the commissioner to furnish,
upon the payment of the actual necessary expenses therefor, to be
paid by requesting party, a certificate establishing the condition, quality,
grade, pack, quantity or weight of such lot, shipment or consignment ;
such certificate shall be prima facie evidence in all courts of this
State as to the recitals thereof at the time such inspection was made.
The burden of proof shall be upon the commission merchant to prove
the correctness of his accounting as to any transaction which may be
questioned.

Section 1264. Offenses: How Punished.—Any person who shall
assume or attempt to act as a commission merchant, as defined by this
act, without license, or any person who being a commission merchant
and duly licensed, shall,

(a) Impose false charges for handling or for services in con-
nection with farm products; or

(b) Fails to account promptly, correctly, fully and properly and
to make settlement therefor as in this act provided; or

(c) Make false and misleading statements as to market condi-
tions with intent to deceive; or

(d) Make fictitious sales or shall be guilty of collusion to defraud
the consignor, or entered into any combination or combinations to fix
prices; or

(e) Directly or indirectly purchase for his or its own account,
farm products, received by him or it on consignment without prior
authority from the consignor in writing; provided, however, that this
shall not apply to livestock auction markets nor to tobacco warehouse-
men, when the consignor or owner is present in person at the sale of
his livestock or tobacco, or represented by a duly authorized agent; or

({) Intentionally make false statements as to grade, condition,
markings, quality or quantity of farm products shipped or packed in
any manner; or re a

(g) Reconsign such farm products as have been consigned to
him or it to another person, either in the city or town in which the
licensee is located, or to some other point within or without the State
of Virginia, unless consent of the consignor has been first obtained
and in writing, or notice given in writing to the consignor by the
consignee that all or a part of such shipment was reconsigned; or

(h) Sell such farm products consigned to him or it, to another
person owned or controlled by him or it, or in which such licensee
may be interested financially or otherwise, either directly or indirectly,
unless notice is given, in writing, to the consignor by the commission
merchant that all or a part of such shipment was sold to a person in
which he or it is financially interested; or ,

(i) Be intentionally guilty of fraud or deception in the procure-
ment of such license; or , Be
(j) Fail or neglect to give written notice immediately to the
commissioner and the surety on the bond of such commission mer-
chant, or any changes or alterations in the style, name or personnel
of the person to whom such license has been issued; or a
_ (k) Fail to comply in every respect with the provisions of this
act; shall be guilty of a misdemeanor and upon conviction thereof,
shall be punished by a fine of not less than twenty-five dollars and not
to exceed one thousand dollars, or by confinement in the city or county
jail for not more than one year, or both such fine and imprisonment,
in the discretion of the court or jury trying the case. :
_ It is hereby made the duty of the several Commonwealth’s attor-
neys of this State to prosecute all violations of this act subject to
prosecution in their respective cities or counties. Civil suits. and
criminal prosecutions arising by virtue of this act or any of its pro-
visions may be commenced and tried in either the city or county where
the products were received by the commission merchant, or within the
city or county in which the principal place of business of such com-
mission. merchant is located within the State of Virginia, or within
the city.or county in which the violation occurred. _ ow
Section 1265. Employment of Assistants: Adoption of Rules
and Regulations, Constitutionality, Et Cetera——The commissioner is
hereby empowered, subject to the approval of the State Board of Agri-
culture and Immigration, to. employ such persons as may be necessary
and to adopt all needful rules and regulations for the enforcement of
the provisions of this act and for the collection of all fees herein
prescribed. All expenses incident to the enforcement of the pro-
visions of sections twelve hundred and fifty-seven to twelve hundred
and sixty-five, both inclusive, shall be paid from such funds as may be
appropriated for this purpose and in such manner as may be pre-
scribed by law. | | ee a!
4/0: ACTS OF.ASSEMBLY ,VA.