The Levering Coffee Co

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COMPLAINT IN THE MATTER OF THE ALLEGED VIOLATION OF

SECTION & OF AN ACT OF CONGRESS APPROVED SEPTEMBER 26, 114, , Docket 510—May 26, 1920, _ Syrrasus.

Where a corporation engaged in the purchase and sale of coffee, tea, sugar, and cuocow leased coffee urns to proprietors of cafes and

Complaint. 2F.T.C. restaurants in various cities, without other consideration than that such proprietors would purchase all or approximately all of their supplies of coffee from said corporation: Held, That the use of such leases constituted, under the clreumstances set forth, an unfair method of competition in violation of the act of September 26, 1914.

COMPLAINT.

The Federal Trade Commission having reason to believe from a preliminary investigation made by it that The Levering Coffee Co., hereinafter referred: to as the respondent, has within the year last past violated and is violating section 5 of the act of Congress approved September 26, 1914, entitled “An act to create a Federal Trade Commission, to define its powers and duties, and for other purposes,” and it appearing that a proceeding by it in respect thereof would he to the interest of the public, issues this complaint, stating its charges in this respect on information and belief as follows:

Paracravn 1. That the respondent, The Levering Coffee Co., is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Maryland, with its principal office and place of business located at the city of Baltimore, in the State of Maryland, and is now and at all times hereinafter mentioned has been engaged in the business of dealing in coffee and ea, purchasing same in wholesale quantities in the various States of the United States and in foreign countries, causing same to be transported from points outside the State of Maryland to its place of business in Baltimore, Mad., where said commodities are resold by respondent in wholesale quantities in the State of Maryland and States adjacent. thereto and in the District of Columbia, and there is continuously, and has been at all the times herein mentioned, a constant current of trade and commerce in the commodities dealt in by said respondent, as aforesaid, between and among the various States and Territories of the United States, the District of Columbia, and foreign countries; that said respondent in the conduct of its said business has been in direct active competition with other individuals, partnerships, and corporations similarly engaged.

407 Findings,

Par. 2, That said respondent in the conduct of its business, as set out in paragraph 1 herein, with the purpose, intent, and effect of stifling and suppressing competition in the sale of coffee and tea, has adopted the practice of leasing or loaning coffee urns to customers engaged in the business of conducting inch rooms and restaurants, upon the expressed agreement that such customers would thereafter purchase from respondent all coffee and tea used by them in the conduct of their respective businesses, and without other consideration.

REPORT, FINDINGS AS TO THE FACTS, AND

ORDER.

The Federal Trade Commission having issued and served its complaint herein wherein it is alleged that it had reason to believe that the above-named respondent, The Levering Coffee Co., has been and now is using unfair methods of competition in interstate commerce in violation of the provisions of section 5 of an act of Congress approved September 26, 1914, entitled “An act to create a Federal Trade Commission, to define its powers and duties, and for other purposes,” and that a proceeding by it in that respect would be to the interest of the public, and fully stating its charges in this respect and the respondent having filed its answer, admitting that the matters and things alleged in the said complaint are true and thereafter the Commission, pursuant to notice, having proceeded to introduce its evidence in support of its charges before a duly authorized examiner and the respondent having failed to appear and making default, and counsel for the Commission having presented his brief and argument in support of the charges in the said complaint, and the Commission being duly advised in the premises now makes and enters this its report, stating its findings as to the facts and its conclusions.

FINDINGS AS TO THE FACTS, Paracrapn 1. That the respondent, The Levering Coffee Co., is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Maryland, Conctusions, 2ET C. with its principal office and place of business located at the city of Baltimore in said State.

Par.2. That the respondent, The Levering Coffee Co.,. is now and for more than one year last past has been engaged in the business of dealing in coffee and tea, and in the conduct of its business purchases the same in wholesale quantities in various States of the United States and foreign countries, causing the same to be transported therefrom in and to the city of Baltimore, State of Maryland, where the same are sold and reshipped in wholesale quantities to customers in the State of Maryland and States adjacent thereto and in the District of Columbia.

Par. 3. That in the conduct of its business as aforesaid, the respondent, The Levering Coffee Co., for more than four years last past has loaned coffee urns to proprietors of lunch rooms and cafés in the city of Washington, D. C., upon the express condition, agreement, or understanding and without other considerations than that such proprietors would) purchase all of their supplies of coffee from said respondent, a copy of such contracts or agreements is attached hereto and made a part hereof, marked “ Exhibit A.” Par, 4. That proprietors of cafés and lunch rooms in the city of Washington, D. C., have during the four years last. past obtained coffee urns from the Levering Coffee Co. under und by virtue of the terms and agreements of the above-mentioned and described contracts and without other consideration and have ever since and still do purchase their entire or a large percentage of their supplies of coffee frors said the Levering Coffee Co., respondent herein,

Par. 5. That the respondent, The Levering Coffee Co., is now and for more than four years last past has been selling coffee and tea in commerce aforesaid in direct competition with other persons, firms, copartnerships, und corporations similarly engaged.

CONCLUSIONS, That the methods of competition and the business practices set forth in the foregoing findings as to the facts are, under the circumstances set forth therein, unfair methods of competition in interstate commerce in violation of the provi- 407 Eehibit. sions of section 5 of the act of Congress approved September 26, 1914, entitled “An act to create a Federal Trade Commission, to define its powers and duties, and for other purposes.”

ExHinit A.

This agreement, made this -- _ _ day of ~~~. 191_ by and between the Levering Coffee Co., of the city of Baltimore, State of Maryland, party of the first part, und ... of ~~... » purty of the second part. ' Witnesseth that the party of the second part does hereby agree to purchase from the party of the first part all of the coffee and tea used by nim in the conduct of his business, from the date hereof until this agreement is terminated as hereinafter provided, and to pay promptly all bills owing to the purty of the first part as same shall Inuture, In consideration whereof the party of the first part does hereby agree to loan to the party of the second part..- ~~ ~-~ ... fur so long a time or term as the party of the second part continues to purchase from the party of the first part all of the coffee and tea used by him in the conduct of his business, or until this agreement be terminated for any cause whatsvever. It is understood and agreed that if, at any time, the party of the second purt fails to purchase from the purty of the first part all of the coffee and tea used by him In the conduct of his business us aforesaid, or in case that suid party of the second part fails to settle his accounts due and owing to the said party of the first part promptly as they mature, or when this agreement Is terminated for any reason Whulsvever, the said purty of the first part shall have the right at uny time thereafter to repossess themselves of the said coffee urns without notice or proceeding ut law, and the said party of the second purt hereby agrees penceably and promptly to deliver up the same to the said party of the first part, their urgent or representative without let or hindrance, it being hereby expressly understood and agreed that the title to the said coffee urns, efe., shall at all times remain in the party of the first part, said coffee urns, ete., being hereby loaned but not sold.

And the said party of the second part covenants not to injure or to remove the said coffee urns from the place to which they are delivered, nor in any way to part with their custody or possession without first obtaining the consent in writing of the party of the first part. And the said party of the second part does hereby agree to pay to the sail! purty of the first part the cost of replacing any and all parts of sald coffee urns that may become broken or damaged while in his Possesston,

Orde 2Fr.T.C

It is hereby understood and agreed that this agreement shall remain in full force until there is a breach by one of the parties hereto, or until terminated by the parties hereto or either of them, by giving at least five days previous notice thereof in writing; or should the party of the second part fail to settle promptly all of his accounts with the sald party of the first part us they mature, the suid party of the first purt can immediately terminate this agreement without notice, and repossess themselves of the said coffee urns in manner as mentioned above, wherever they may be found. It is also agreed and understoo.] that the continuation of this agreement from tline to time is) conditioned upon both of the parties hereto remaining in’ the same business fi which they are engaged at the date hereof,

It is hereby declared and understood that no agreement, written or verbal, has been made modifying cr altering the above in any partleular, In witness whereof the said parties have hereunto set their hands and seals the day and year aforesaid.

Witness: ; on - Hn eee eee nee ene nee == (Seal) The undersigned owner and landlord of premises on which the within-mentioned coffee urns are to be placed, in’ consideration of sald coffee urns being delivered on said promises does hereby waive all of his rights against ssid urns for rent under the lien pledge and privilege or any other Inw accorded to liudlords, Witness;

(Owner Landlord.)

ORDER TO CEASE AND DESIST.

The Federal Trade Commission having issued and served its complaint herein and the respondent, The Levering Coffee Co., having filed its answer, admitting the allegations in the said complaint and the Federal Trade Commission having thereafter introduced its evidence in support of the charges in the said complaint, and having made and filed its report, containing its findings as to the facts and its conclusions that the respondent has violated the provisions of section 5 of an act of Congress approved September 26, 1914, entitled, “An act to create a Federal Trade Commission, to define its powers and duties, and for other purposes,” which report, 407 Syllabus, findings, and conclusions are hereby referred to and made a part hereof: Now, therefore,

It is ordered, That the respondent, The Levering Coffee Co., of Maryland, and its officers, directors, representatives, agents, servants, and employees, cease and desist from directly or indirectly:

1. Leasing or loaning coffee urns to customers upon the agreement, condition, or understanding, either expressed or implied, that such customers will thereafter purchase from the respondent all the coffee used by them in the conduct of their respective businesses. 2° From continuing to operate under any such contracts or agreements heretofore made and entered into.

3. From doing any matter or thing which would have the same unlawful effect as that resulting from the practice herein prohibited and by reason of which this order is made.

It is further ordered, That the respondent, The Levering Coffee Co., shall file a report in writing with the Commission 90 days from notice hereof, stating in detail the manner in which this order has been complied with and conformed to.

FEDERAL TRADE COMMISSION

v.

PAN MOTOR CO.,, AND SAMUEL C. PANDOLEFO.

COMPLAINT IN TITE MATTER OF THE ALLEGED VIOLATION OF SEC-

TION 5 OF AN ACT OF CONGRESS APPROVED SEPTEMBER 26, 1914.

Docket 273.—May 27, 19290.