Chap. 406.—An ACT to provide for the regulation of the business of distribut-
ing and selling motor vehicles; defining, regulating and providing for the licens-
ing of motor vehicle dealers, motor vehicle salesmen, motor vehicle manufac-
turers, distributors, wholesalers, factory branches, distributor branches, fac-
tory representatives, and distributor representatives; conferring powers and
imposing duties on the Commissioner of Motor Vehicles and his agents, other
officers of the State Government, and on courts; prescribing fees and appro-
priating the same for the administration of this Act; prohibiting certain prac-
tices, and prescribing penalties. [H 331

Approved April 4, 1944

Be it enacted by the General Assembly of Virginia, as follows:
1. Section 1. The short title of this act is “Virginia Motor Vehicle
ler Licensing Act’.

Section 2. Definitions—Unless the context otherwise requires, the
owing words and terms for the purpose of this act, shall have the
owing meanings:

(a) “Motor Vehicle” means any motor propelled vehicle, trailer
semi-trailer, required to be registered under the laws of this State.
(b) ‘Motor Vehicle Dealer” and “Dealer” mean any person who:
(1) For commission, money or other thing of value, buys, sells, or
hanges, either outright or on conditional sale, bailment lease, chattel
rtgage or otherwise howsoever, or offers or attempts to negotiate a
2 or exchange of an interest in, new or new and used motor vehicles,
ised motor vehicles alone.

(2) Is engaged, wholly or in part, in the business of selling new
new and used motor vehicles, or used motor vehicles only, whether
not such motor vehicles are owned by such person, copartnership,
ociation or corporation.

The term “motor vehicle dealer” or “‘dealer’’ does not include:

(1) Receivers, trustees, administrators, executors, guardians or
er persons appointed by or acting under judgment or order of any
rt, or their employes when engaged in the specific performance of
ir duties as such employes.

(2) Public officers, their deputies, assistants or employes, while
forming their official duties.

(3) Persons disposing of motor vehicles acquired for their own
-and actually so used, when the same shall have been so acquired and
d in good faith and not for the purpose of avoiding the provisions of
5 act.

(c) “New motor vehicle dealer” means a motor vehicle dealer who
ys, sells or exchanges, or offers or attempts to negotiate a sale or
change of an interest in, or who is engaged, wholly or in part, in the
siness of selling, new or new and used motor vehicles.

(d) ‘Used motor vehicle dealer” means a motor vehicle dealer
o buys, sells or exchanges, or offers or attempts to negotiate a sale
exchange of an interest in, or who is engaged, wholly or in part,
he business of selling, used motor vehicles only.

(e) ‘Motor vehicle salesman” or “‘salesman’’ means any individual
who is employed as a salesman by, or has an agreement with, a motor
vehicle dealer, to sell or exchange motor vehicles.

({) “Manufacturer” means any person, resident or nonresident
in this State, who manufactures or assembles motor vehicles.

(g) “Distributor” or “wholesaler” means a person, resident or
non-resident in this State, who in whole or in part, sells or distributes
motor vehicles to motor vehicles dealers in this State, or who main-
tains a distributor representative in this State.

(h) “Factory branch” means a branch office, maintained by a
manufacturer, for the sale of motor vehicles to distributors, or for the
sale of motor vehicles to motor vehicle dealers, or for directing or super-
vising, in whole or in part, its representatives in this State.

(1) “Distributor branch” means a branch office maintained by a
distributor or wholesaler, for the sale of motor vehicles to motor vehicle
dealers, or for directing or supervising, in whole or in part, its repre-
sentatives in this State.

(j) “Factory representative” means an individual employed by
a person who manufactures or assembles motor vehicles, or by a factory
branch, for the purpose of making or promoting the sale of its motor
vehicles, or for supervising or contacting its dealers or prospective
dealers.

(k) “Distributor representative” means an individual employed bv
a distributor or wholesaler, or by a distributor branch, for the purpose
of making or promoting the sale of motor vehicles dealt in by it, or for
supervising or contacting its dealers or prospective dealers.

(1) “Established place of business” means a salesroom in a perma-
nent enclosed building or structure, either owned in fee or leased, at
which a permanent business of bartering, trading and selling of motor
vehicles will be carried on as such in good faith and at which place of
business shall be kept and maintained the books, records and files neces-
sary to conduct the business at such place, and shall not mean residence,
tents, temporary stands, or other temporary quarters, nor permanent
quarters occupied pursuant to any temporary arrangement, devoted
principally to the business of a motor vehicle dealer, as herein defined.

(m) “Retail instalment sale’ means and includes every sale of one
or more motor vehicles to a buyer for his use and not for resale, in
which the price thereof is payable in one or more instalments over a
period of time and in which the seller has either retained title to the
goods or has taken or retained a security interest in the goods under
form of contract designated either as a conditional sale, bailment lease,
chattel mortgage or otherwise.

(n) “Commissioner” mean the Commissioner of the Division of
Motor Vehicles, or his duly authorized agent.

(o) “Division” means the Division of Motor Vehicles.

(p) ‘‘Person” means any individual, copartnership, firm, associa-
tion, joint stock company, corporation, or combination of individuals of
whatsoever form and character.

(q) Words used in the singular shall include the plural, and the
plural the singular. Words used in the masculine gender shall include
the feminine and neuter. Words used in the past or present tense, shall
anclude the future.

Section 3. Licenses Required—(a) It is unlawful for any new
motor vehicle dealer, used motor vehicle dealer, motor vehicle salesman,
manufacturer, factory branch, distributor branch, factory or distributor
representative to engage in business as such in this State without first
obtaining a license as provided in this act. If any motor vehicle dealer
acts as motor vehicle salesman, he shall obtain a motor vehicle salesman’s
license in addition to a motor vehicle dealer’s license. A manufacturer or
factory branch or distributor or distributor branch, licensed as such,
may also operate as a motor vehicle dealer without additional license.

Section 4. Licenses, Application, Granting, Expiration—(a) Ap-
plication for license shall be made to the Commissioner at such time,
in such form, and contain such information as the Commissioner shall
require, and shall be accompanied by the required fee.

(b) The Commissioner shall require in such application, or other-
wise, information relating to the matters set forth in section ten of this
act as grounds for the refusing of licenses, and to other pertinent matter
commensurate with the safeguarding of the public interest in the locality
in which the applicant proposes to engage in business, all of which shall
be considered by the Commissioner in determining the fitness of the
applicant to engage in the business for which he seeks a license.

(c) All licenses that are granted shall expire, unless sooner revoked
or suspended, on June thirtieth of the year following date of issue.

(d) Supplemental licenses shall be issued for each place of business,
operated or proposed to be operated by the licensee, that is not con-
tiguous to other premises for which a license is issued.

Section 5. License Fees—(a) The license fee for each fiscal year
or part thereof, shall be as follows:

(1) For motor vehicle dealers, distributors and wholesalers, fifteen
dollars for each principal place of business, plus five dollars for a sup-
plemental license for each car lot not immediately adjacent to a principal
place of business.

(2) For manufacturers, twenty dollars, and for each branch factory
in this State, ten dollars.

(3) Manufacturers, wholesalers and distributors may operate as
a motor vehicle dealer, without any additional fee or license.

(4) For motor vehicle salesmen two dollars.

(5) For factory representatives, or distributor branch representa-
tives, ten dollars.

(b) All licensing fees shall be collected by the Commissioner as
provided in this act and by him shall be paid into the State treasury and
are hereby appropriated to the said Commissioner for the purpose of
administering, enforcing and effectuating the purposes of this act. All
payments out of this appropriation shall be made by the Treasurer of
Virginia on warrants of the Comptroller, issued on vouchers signed by
the Commissioner or such other person or persons as shall be designated
by him.
(c) The licenses and fees required by this act are in addition t
licenses, taxes and fees imposed by other provisions of law, and nothin:
contained in this section or in any other section of this act shall be cor
strued as exempting any person, firm or corporation of any license, ta
or fee imposed by any other provision of law.

Section 6. Office, Etc.; Display of License; Advertising—(a) Th
licenses of new motor vehicle dealers, used motor vehicle dealers, manv
facturers, factory branches, distributors, and distributor branches shz
specify the location of each place of business or branch or other locatic
occupied or to be occupied by the licensee in conducting his busines
as such, and the license or supplemental license issued therefor shall b
conspicuously displayed on each of such premises. In the event an
such location is changed, the Commissioner shall endorse the chang
of location on the license, without charge if the new location is withn
the same political subdivision. A change in location to another politica
subdivision shall require a new license.

(b) Each dealer shall keep a current list of his licensed salesmen
showing names, addresses and serial numbers of their licenses, poste
in a conspicuous place in each place of business.

(c) Whenever any licensee places an advertisement in any news
paper or publication, the type and number of the license shall appea
therein.

Section 7. Licenses to Be Carried.—Every salesman, factory repre
sentative and distributor representative shall carry his license when en
gaged in his business, and shall display the same upon request. Th
license shall name his employer, and in the event of a change of em
ployer, he shall immediately mail his license to the Commissioner, wh
shall endorse such change on the license without a charge.

Section 8. Use of Unimproved Lots and Premises.—A license
motor vehicle dealer may use vacant lots and premises for the sale, an
display of motor vehicles; provided, that if such lots and premises ar
not more than twenty-five yards distance from the dealer’s establishe
place of business, a supplemental license is obtained for each such Ic
or premises.

Section 9. Motor Vehicle Registration Plates—No motor vehicl
dealer, unless licensed under this act, shall be entitled to receive an
dealer’s registration plates under the provisions of the laws of this Stat
providing for the issuance of such registration plates.

Section 10. Grounds for Denying, Suspending or Revoking Li
censes.—A license may be denied, suspended or revoked on any one o
more of the following grounds:

(1) Material misstatement in application for license.

(2) Filing a materially false or fraudulent tax return as certife
by the tax commission.

(3) Conviction of a felony, or pleading nolo contendere or guilt
to an indictment for a felony.

(4) Wilful failure to comply with any provision of this act o
any lawful rule or regulation promulgated by the Commissioner unde
this act. |
(5) Being a motor vehicle dealer, failure to have an established
place of business as defined in this act.

(6) Being a new motor vehicle dealer, engaging in the business of
selling at retail any new motor vehicle without having authority of a
written contract or franchise with the manufacturer or authorized dis-
tributor of that particular make of new motor vehicle.

(7) Wilfully defrauding any retail buyer, to the buyer’s damage,
or any other person in the conduct of the licensee’s business.

x (8) Wilful failure to perform any written agreement with any retail
uyer.

(9) Employment of fraudulent devices, methods or practices in
connection with compliance with the requirements under the statutes of
this State with respect to the retaking of motor vehicles under retail
instalment contracts and the redemption and resale of such motor ve-

icles.

(10) Having used unfair methods of competition or unfair de-
ceptive acts or practices.

(11) Advertising by any means any assertion, representation or
statement of fact which is untrue, misleading or deceptive in any par-
ticular relating to the conduct of the business licensed or for which a
license is sought.

Section 11. Refusal of License; Notice; Hearing —The Commis-
sioner shall act upon all applications for a license within thirty days after
the receipt thereof, by either granting or refusing the same. Before deny-
Iny any application for a license, the applicant shall be given a hearing
at such time and place as determined by the Commissioner. All such
hearings shall be public and shall be held with reasonable promptness.

Section 12. Suspension, Revocation and Refusal to Renew Licenses.
—WNo license shall be suspended or revoked, or renewal thereof refused,
until a written copy of the complaint made has been furnished to the
licensee against whom the same is directed, and a hearing thereon has
been had before the Commissioner. At least ten days’ written notice of
the time and place of such hearing shall be given to the licensee by regis-
tered mail addressed to his last known post office address or as shown on
his license or other record of information in possession of the Commis-
sioner. At any such hearing, the licensee shall have the right to be heard
personally or by counsel. After hearing, the Commissioner shall have
power to suspend, revoke or refuse to renew the license in question. Im-
mediate notice of any such action shall be given to the licensee in the
manner herein provided in the case of notices of hearing.

Section 13. Complaints; Cost of Examination—The Commissioner
may inspect the pertinent books, records, letters and contracts of a
licensee relating to any written complaint made to him against such
licensee. If such licensee is found to have violated this act or any lawful
order of the Commissioner the actual cost of such examination shall be
paid by such licensee so examined within thirty days after demand therefor
by the Commissioner. The Commissioner may maintain an action for
the recovery of such costs in any court of competent jurisdiction.
Section 13-a. It is unlawful for any dealer or salesman or any em
ployee of dealer or representative of either, to coerce or offer anything o
value to any purchaser of a motor vehicle to provide any type of insuranc
coverage on said motor vehicle. It is further provided that no dealer
salesman, or representative of either, shall accept any policy as collatera
on any vehicle sold by him to secure an interest in such vehicle in am
company not properly qualified in Virginia.

Section 14. Acts of Officers, Directors, Partners and Salesmen.—1I
a licensee is a copartnership or corporation, it shall be sufficient cause fo:
the denial, suspension or revocation of a license that any officer, director o:
trustee of the copartnership or corporation, or any member in case o!
partnership, has committed any act or omitted any duty which would Ix
cause for refusing, suspending or revoking a license to such party as ar
individual. Each licensee shall be responsible for the acts of any or a.
of his salesmen while acting as his agent, if such licensee approved of o:
had knowledge of said acts or other similar acts and after such approva
or knowledge retained the benefit, proceeds, profits, or advantages ac
cruing from said acts or otherwise ratified said acts.

Section 15. Appeals From Actions of the Commissioner.—Any per
son aggrieved by the action of the Commissioner in refusing to grant o1
renew a license, or in suspending or revoking a license, or by any othe:
action of the Commissioner which is alleged to be improper, unreasonabl
or unlawful, may appeal from such action of the Commissioner in writing
to any court of competent jurisdiction in the city or county in which the
applicant or licensee intends to conduct his business.

Appeals from refusals to grant or renew licenses, and from suspen.
sions and revocations of licenses must be taken within thirty days afte
such refusal, suspension or revocation of which action immediate notic:
shall be given the licensee by registered mail addressed as provided ir
section twelve of this act. No such appeal shall act as supersedeas excep
on special allowance of the court before which the appeal is pending.

Appeals shall be taken by serving upon the Commissioner writter
notice of such appeal, together with reasons for such appeal. Such serv.
ice shall be made by filing the said notice of appeal in the office of the
Commissioner.

Within thirty days after the service of such notice of appeal, the Com:
missioner shall file with the clerk of the court in which the appeal is filec
a transcript of the records of the proceedings, if any, in his office. duly
certified over the seal of his department of which record shall include al:
papers on file with the Commissioner affecting or relating to the inquin
or investigation, if any, conducted by the Commissioner and all evidence
taken in the hearing, if any, including the stenographic notes of testimony.
Notice of the filing of the said transcript, with the term and number to
which filed, shall be forthwith given by the Commissioner to the licensee
and as well to the party or parties, if any, upon whose complaint the pro-
ceedings before the Commissioner were instituted. The cost of the said
transcript, at twenty-five cents per folio, and one dollar for certification,
shall be entered as part of the record costs in the cause, to be paid as the
court may direct. In all proceedings upon such appeal, the Attorney
General shall appear for and represent the Commissioner.
The court, upon application by the Commissioner or the appellant,
shall fix a time and place for hearing, at which time, or at any adjournment
hereof, the appeal shall be heard by the judge or judges of the court with
>r without a jury. |

After such hearing, the court. shall affirm the adjudication unless it
slaall find that the same is in violation of the constitutional rights of the
appellant, or is not in accordance with law, or that any finding of fact
nade by the Commissioner and necessary to support his adjudication is
10t supported by substantial evidence. If the adjudication is not affirmed,
‘he court may set aside or modify it in whole or in part or may remand
‘he proceedings to the Commissioner for further disposition in accordance
with the order of the court.

Either party may appeal from the decision of the court to the Su-
preme Court of Appeals but not later than thirty days after the entry of
the decree by said court. Such appeals shall be taken and prosecuted in
the same manner and with like effect as is provided by law in other cases
of appeal to the Supreme Court of Appeals.

The remedy at law provided by this section shall not in any manner
impair the right to applicable equitable relief ; and such right to equitable
relief is hereby preserved, notwithstanding the provisions of this section.

Section 16. Powers of the Commissioner; Rules and Regulations.
—(a) The Commissioner shall promote the interests of the retail buyers
of motor vehicles.

(b) The Commissioner shall have power to prevent unfair methods
of competition and unfair or deceptive acts or practices.

(c) The Commissioner shall have the power in hearings arising
under this act to determine the place, in the State where they shall be
held; to subpoena witnesses; to take depositions of witnesses residing
without the State; in the manner provided for in civil actions in courts
of record; to pay such witnesses the fees and mileage for their attend-
ance as 1s provided for witnesses in civil actions in courts of record:
and to administer oaths.

(d) The Commissioner may, whenever he shall believe from evi-
dence submitted to him that any person has been or is violating any
provisions of this act, in addition to any other remedy, bring action in
the name of the State against such person and any other persons con-
cerned or in any other way participating in, or about to participate in
practices or acts so in violation, to enjoin such person and such other
persons from continuing the same.

Section 17. (a) The Commissioner may make such rules and
regulations not inconsistent with the provisions of this act, as he shall
deem necessary or proper for the effective administration and enforce-
ment of this act, provided that a copy of such rules and regulations shall
be mailed to each motor vehicle dealer licensee ten days prior to the
effective date of such rules and regulations.

(b) No licensee shall be subject to examination or audit by the Com-
nussioner except as provided in section thirteen of this act.

Section 18. Instalment Sales—(a) Every retail instalment sale
shall be evidenced by an instrument in writing, which shall contain all
the agreements of the parties and shall be signed by the buyer.
(b) Prior to or at about the time of the delivery of the motor
vehicle the seller shall deliver to the buyer a written statement describing
clearly the motor vehicle sold to the buyer, the cash sale price thereof,
the cash paid down by the buyer, the amount credited the buyer for any
trade-in and a description of the motor vehicle traded, the amount of
the finance charge, the amount of any other charge specifying its purpose,
the net balance due from the buyer, the terms of the payment of such
net balance and a summary of any insurance coverage to be effected.
The Commissioner may determine the form of such statement to be in-
cluded therein.

(c) A violation of any provision of this section shall bar recovery
of any finance charge or any interest on the deferred balance by the
seller, or assignee of the seller who, at' the time of the assignment, had
knowledge of such violation, in any suit upon a sales contract arising
from the sale where such violation occurred.

Section 19. Instalment Sales Contracts; Coercion of Retail Dealer
by Manufacturer or Distributor Prohibited—(a) It is unlawful for
any manufacturer, wholesaler or distributor, or any officer, agent or rep-
resentative of either, to coerce, or attempt to coerce any retail motor
vehicle dealer or prospective retail motor vehicle dealer in this State
to sell, assign or transfer any retail instalment sales contract, obtained
by such dealer in connection with the sale by him in this State of motor
vehicles manufactured or sold by such manufacturer, wholesaler or dis-
tributor, to a specified finance company or class of such companies, or
to any other specified persons, by any of the acts or means hereinafter
set forth, namely:

(1) By any statement, suggestion, promise or threat that such
manufacturer, wholesaler or distributor will in any manner benefit or
injure such dealer, whether such statement, suggestion, threat or promise
is express or implied, or made directly or indirectly.

(2) By any act that will benefit or injure such dealer.

(3) By any contract, or any express or implied offer of contract.
made directly or indirectly to such dealer, for handling such motor
vehicles on the condition that such dealer sell, assign or transfer his
retail instalment sales contract thereon, in this State, to a specified
finance company or class of such companies, or to any other specified

erson.

P (4) By any express or implied statement or representation made
directly or indirectly, that such dealer is under any obligation what-
soever to sell, assign or transfer any of his retail sales contracts, in this
State, or motor vehicles manufactured or sold by such manufacturer,
wholesaler or distributor to such finance company, or class of companies,
or other specified person, because of any relationship or afhliation be-
tween such manufacturer, wholesaler or distributor and such finance
company or companies or such specified person or persons.

(b) <Any such statements, threats, promises, acts, contracts or offers
of contracts, when the effect thereof may be to lessen or eliminate com-
petition, or tend to create a monopoly, are declared unfair trade practices
and unfair methods of competition and against the policy of this State,
are unlawful and are hereby prohibited. ©

Section 20. Coercion of Dealers; Cancellation of Dealer Franchises.
—lIt is unlawful for any manufacturer, factory branch, distributor or
distributor branch, or any field representative, officer, agent, or any
representative whatsoever of any of them,

(1) To coerce, or attempt to coerce any dealer to accept delivery
of any motor vehicle or vehicles, parts or accessories therefor, or any
other commodities, which shall not have been ordered by such dealer.

(2) To coerce, or attempt to coerce any dealer to enter into any
agreement with such manufacturer, factory branch, distributor or dis-
tributor branch, or representative thereof, or do any other act unfair
to such dealer, by threatening to cancel any franchise existing between
such manufacturer, factory branch, distributor, distributor branch or
representative thereof, and such dealer.

(3) Unfairly, without due regard to the equities of a dealer, and
without just provocation, to cancel the franchise of such dealer.

Section 21. Manufacturer or Distributor Franchise.—It is unlaw-
ful for any motor vehicle dealer to sell or offer for sale any new motor
vehicle unless he shall have written contract or franchise with the manu-
facturer or authorized distributor or dealer of that particular make of
new motor vehicle.

Section 22. Prohibited Solicitation and Compensation.—It is un-
lawful for any motor vehicle dealer or salesman licensed under the pro-
visions of this act, directly or indirectly, to solicit the sale of a motor ve-
hicle through a pecuniarily interested person; or to pay, or cause to be
paid, any commission or compensation in any form whatsoever to any
person in connection with the sale of a motor vehicle, unless such person
is duly licensed as a salesman in the employ of said dealer.

Section 23. Salesmen Selling for Other Than His Employer Pro-
hibited.—It is unlawful for any motor vehicle salesman licensed under
this act to sell or exchange or offer or attempt to sell or exchange any
motor vehicle except for the licensed motor vehicle dealer by whom he
is employed, or to offer transfer or assign, any sale or exchange, that
he may have negotiated, to any other dealer or salesman.

Section 24. Penalties—Any person violating any of the provisions
of this act shall be guilty of misdemeanor and upon conviction thereof
shall be sentenced to pay a fine of not exceeding five hundred dollars,
or to undergo imprisonment for not to exceed six months, or by both
such fine and imprisonment.

Section 25. Severability—The sections and provisions of this act
are severable. If any section or provision thereof is found by a court of
competent jurisdiction to be unconstitutional and void, the remaining
sections and provisions thereof shall, nevertheless, remain valid unless
the court finds the valid provisions are so essentially and inseparably
connected with, and so depend upon, the void provision, that it cannot
be presumed the Legislature would have enacted the remaining valid
provisions, which standing alone, are incomplete and are incapable of
being executed in accordance with the legislative intent.