Dallas E. Winslow, Inc

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IN THE MATTER OF DALLAS E. WINSLOW, INC., TRADING AS DURANT l\IOTOR CAR COMPANY COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATIO:-l OF SEC. ri OF AN ACT O:h' CONGRESS APPROVED SEPT. 26, 1914 Dod,·et 2628. Complaii1t, Nov. 14, 1935-Decision, Sept. 21, .1936 Where a corporation engaged in sale of automobile parts and accessories as successor, elsewhere, to conc~rn wllich, following purchase flom receiver of unassembled parts of Durant lllotor Company, theretofore assembler and distributor of Durant, Star, and Rugby cars, entered upon and widely advertised business of selling replacement parts for said automobiles, but Which, as stocl!: of parts thus bought at plant of said motor company became depleted, began purchase of new supplies from the manufacturers so that parts advertised, sold, and distributed by it came to consist, to a substantial extent, of t.hose derived from sources other than said company- ( a) Adopted and used ns a trade name, in soliciting and selling its said products, words "Durant l\Iotor Car Company", and made use of anJ. featured word "Durant" and purchase of authorized or genuine Durant parts and direct from factory service, through such statements in catalogues and other advertisements and advertising matter as "Buy only authorized Dm·ant parts direct from the fu<:tory", "Prices again slashed for genuine DQrant parts," " • • • 'Ve uow take a pardonable pride in maldng the smtement that today Durnnt owners ran buy from us genuine parts for their curs MORE CHEAPLY THAN EVER BEFORE IN DURANT HISTORY. Durant Motor Car Company, Lansing, Michigan," and "\Ve've turned the plant upside down to serve you EVEN BETTER THAN BEFORE. Direct from the factory • "' "' Durant Motor Car Company, Lansing, Michigan";

(b) Set forth In catalogues depiction of large plant occupied by Durant 1\Ioto~·­ Car Company prior to its adjudication as bankrupt, together with tit!!', "The Dnrant factory at Lansing, Michigan", and made such statements a~ ''Every replacement part you order is shipped to you from this mammoth Plant", and invited customer's cooperation by purchasing all parts made from it SQ as to assist in maintaining ''this most Important and economical direct factory scn·ire", and Invited prospective purchasers to "Sen1l aU orders for Star parts direct to the factory. Durant 1\lotor Car Company, Lam;ing, Michigan";

:Notwithstanding fact receiver's bill of sale of unused parts did not convey lastnamed company's good-will or right to use its name, and none of parts thus advertised, sold, and uistrlbuted were made by such corporation or by Its predecessor nor, in sullstantial portion, by the Durant Motor C(om- Penny, and neither It nor its predecessor owned or operated any factory W Wherein lillch parts were fabricated:

itb tendency and capacity to confuse, mislead and deceive purchasers into belle! that it was the Durant 1\Iotor Car Company or successor thereto, 7~015m-:l'l-vol. 23--32 Complaint 23 F. T. C. and to divert trade to it from competitors: to the substantial injury of competition throughout the States:

.lleld, That such acts and practices, under the conditions. and circumstances described, were to the prejudice of the public and competitors and constituted unfair methods of competition.

Defore iJfr. lV. lV. Sheppard, trial examiner. iJ! r. Morton N esrnith for the Commission. Mr. Franklin K. Lane, of Washington, D. C. and Lightner, Omwford, Sweeny, Dodd & Toohy, of Detroit, Mich., for respondent. Col\rPLAINT Pursuant to the provisions of an Act of Congress entitled "An Act to create a Federal Trade Commission, to define its powers and D.duties, and for other purposes," approved September 26, 1914, the Federal Trade Commission, having reason to believe that Dallas E. ·winslow, Inc., a corporation~ trading as Durant Motor Car Company, hereinafter referred to as respondent, has been and now is using unfair methods of competition in commerce, as "commerce" is defined in said act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, states its charges in that respect as follows: PARAGRAPH 1. Dallas E. \Vinslow, Inc., is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Michigan, trading as Durant Motor Car Company, with its principal place of business on Holden A venue at Lincoln Street in the city of Detroit, State of Michigan. It is now and has been for several years last past engaged in the business of buying, selling, and distributing automobile parts and accessories. The respondent causes said automobile parts and accessories, when sold, to be transported from its principal place of business into and through numerous States of the United States other than the State of Michigan, to purchasers thereof at their respective points of location. PAR. 2. In the course and conduct of its business as aforesaid, respondent is in competition with other individuals, partnerships, -and corporations engaged in the purchase, sale, and distribution of ·automobile parts and accessories, in commerce between and among the various States of the United States.

PAn. 3. The Durant Motor Company, a corporation, was formerly engaged, at the city of Lansing, State of Michigan, in the assembling of parts which it purchased from the manufacturers thereof, into complete cars, and in the sale and distribution of such assembled cars under the trade names of Durant, Star, and Rugby auto- DURANT l\IOTOR CAR CO. 469 467 Complaint mobiles. In to wit: 1931, said company was adjudged to be insolvent, and a receiver was appointed, which receiver, acting under the authority of the United States District Court for the Southern Division of the Eastern District of Michigan, sold and conveyed its assets to one Joseph R. Deins on the 26th day of February 1932, who, on the same day, sold and conveyed said assets to Fuller-Johnson Corporation. Said assets consisted of all unassembled parts on hand, certain office furniture, machinery and bin equipment. Said last harned corporation on to wit: the 5th day of June 1933, sold and conveyed said assets to the respondent herein. The respondent, Dallas E. 'Winslow, Inc., thereupon adopted as a trade name Durant Motor Car Company, and entered upon the business of selling and distributing replacement parts for the Durant, Star, and Rugby automobiles, and advertised the same widely under said trade name. The parts so sold and distributed by respondent at first consisted mainly of those parts purchased from the receiver by Deins and turned over at the plant, but subsequently certain of such parts became depleted, and the respondent began to order new supplies from t~e manufacturers thereof until the parts so advertised, sold, and distributed consisted and now consist, to a substantial extent, of parts not derived from the original Durant Company, but purchased from Qther sources. Subsequently respondent moved its entire business :from Lansing, Mich., to Detroit, :Mich. The respondent rented only a small part of the factory formerly occupied by the Durant :Motor Company of Lansing, .Mich., from the concern who purchased this factory from the receiver.

PAn, 4. In the course and conduct of its business as aforesaid: respondent, in soliciting the sale of and selling its parts and equipment in interstate commerce made the following and other similar -statements and represcntati~ns in catalogues, advertisements, and advertising matter distributed in interstate commerce among custom~rs and prospccti ve customers :

Buy only authorized Durant parts direct from the factory. Prices again slashed for genuine Durant parts. b lly these ecouomlPs and reductions in materials from our suppliers, we have een able to lower our costs, which iu turn has enabled us to again lower our llnrts prices; in some instances to the extent of cutting otr 50o/o of our former ·Quotation~. Evpry item has been gone over carefully and all possible reductions made. You may therefore rest assured we have gone our limit in reducing Prices In that you are now buying authorized parts just as cheaply ns they can llosstbJy be I!Old tor. We now take a pardonable pride fn making the statement ' 470 FEDERAL TRADE COl\IMISSION DECISIONS Complaint 23F. T.C.

that today Durant owners can buy from us genuine varts for their cars 1\!0RE CHEAPLY THAN EVER BEFORE IN DURANT HISTORY. Durant Motor Car Company, Lansing, Michigan. We have turned the plant upside down to serve you EVEN BETTER THAN BEFORE. Direct from the factory. • • • Durant :Motor Cur Company, Lan~ing, Michigan.

In one of respondent's catalogues there appears a pictorial repre· sentation of the large plant occupied by the Durant Motor Car Com· pany of Michigan prior to its adjudication of insolvency, and Leneath is the title:

The Durant Factory at Lansing, Michigan.

Every replacement part you order is shipped to you from this mammoth plant. We ask your cooperation by purchasing from us ALL parts needed by you, as thereby you assist in maintaining for your benefit, as well as ours, this most important and economical direct factory service. Send all orders for Star parts direct to the factory. PAR. 5. In truth and in fact, the use of the trade name "Durant l\fotor Car Company" has the tendency and capacity to confuse, mislead, and deceive purchasers into the belief that the respondent is the Durant Motor Car Company or its successor, although the decree of the United States Court for the Southern Division of the Eastern District of Michigan, on the 26th day of February 1932, did not au· thorize the receiver to convey to the purchaser thereof the good-will or name of said Durant Motor Company, nor did the bill of sale executed by said receiver convey such good-will or right to the use of said name.

In truth and in fact, none of the parts so advertised, sold and dis· tributed, were manufacture<l by the Durant Motor Company or by the respondent, Dallas E. 'Vinslow, Inc., and respondent did and does not own, operate, or control any factory wherein any such parts were or· are fabricated.

PAn. 6. There are, among the competitors of the respondent, many who do not manufacture the automobile parts and accessories distributed by them, and do not in any way falsely represent that they do manufacture said parts and accessories, and do not in any way falsely represent the source from which said parts and accessories were obtained by said competitors for resale. Tllere are among the competitors of the respondent, many who do not in any way repre- Fent that the automobile parts or accessories sold by them were manufactured by or pmchased from the manufacturer of the automobiles for which said parts and accessories WE're designed or are sold. There DURANT MOTOR CAR CO. 471 467 Findings are likewise many among the competitors of the respondent that do not in any way represent that they own, operate, or control the factory or plant in which the automobile parts and accessories sold by them are manufactured.

PAR. 7. The foregoing false and misleading statements and representations on the part of the respondent serve as inducements for a substantial number of purchasers to buy the automobile parts and accessories offered for sale and sold by the respondent, and have a tendency and capacity to, and do, divert a substantial volume of trade from the competitors of the respondent engaged in similar businesses, to the respondent, with the r~sult that substantial quantities of said automobile parts and accessories sold by the respondent are sold to the consuming public on account of said beliefs induced by said false and ll_lisleading representations, and, as a consequence thereof, a substan- ~Ial injury has been done by the respondent to substantial competition 111 commerce among the several States of the United States and in the District of Columbia, as hereinabove detailed. PAn. 8. The above alleged acts and things done by respondent are all to the injury and prejudice of the public and to the competitors of respondent in interstate commerce, and constitute unfair methods of competition in interstate commerce within the intent and meaning of Section 5 of an Act of CounTess entitled "An Act to create aF1 ~ ' eueral Trade Commission to define its powers and duties, and for other purposes," approved September 26, 1914. REPORT, FINDINGS AS TO TIIE Facts, AND OnoER Pursuant to the provisions of an Act of Congress approved September 26 1914 entitled "An Act to create a Federal Trade Comm·lssion, to' define' its powers and duties, and for other purposes,' ' t h e Federal Trade Commission on November 14, 1935, issued and on N'ovember 18, 1935, served its complaint in this proceeding upon the respondent, Dallas E. 1Vinslow, Inc., a corporation trading as Durant Motor Car Company, charging it with the use of unfair methods of competition in commerce in violation of the provisions of said act. Thereafter on December 23 1935, respondent filed its answer to s 'd ' ' 25 a1 complaint through its attorneys. Subsequently, on August , 1936, the day set for hearing, the respondent through its attorneys filed a motion to withdraw said answer and to file in lieu thereof a substitute answer attached thereto. Respondent also executed a stipulation as to the facts. The said substituted answer admits all of the allegations of the complaint and consents that without further eviden<'e or other intervening procedure the Commission may issue and 472 FEDERAL TRADE COl\11\IISSION DECISIONS Findings 23F. T C.

serve upon respondent findings as to the facts and conclusion drawn therefrom and an order to cease and desist from the violations of the law charged in the complaint. The facts so stipulated embrace all of the allegations of the complaint and also respondent in said stipulation consented to the entry of an order to cease and desist based upon said stipulated facts. The Commission thereafter granted respondent's motion to withdraw its original answer, and received and filed respondent's substitute answer. Thereafter the proceeding regularly came on for final hearing before the Commission on the said complaint, substituted answer and stipulation as to the facts, and the Commission having duly considered the same and being fully advised in the premises, finds that this proceeding is in the interest of the public and makes this its findings as to the facts and its conclusion drawn therefrom:

FINDINGS AS TO THE FACTS PARAGRAPH 1. Dallas E. Winslow, Inc., is a corporation organized and existing under and by virtue of the laws of the State of Michigan, and doing business under the trade name and style of Durant Motor Car Company, with its principal place of business located at the city of Detroit, in the State of Michigan. It is now and, for more than one year last past, has been engaged in the sale of automobile parts and accessories, in commerce, between and among various States of the United States; causing said products, when sold, to be shipped from its place of business in the State of Michigan to purchasers thereof located in a State or States 'Of the United States other than the State of Michigan. In the course and conduct of its business, Dallas E. 'Vinslow, Inc., was at all times herein referred to in competition with other corporations, individuals, firms, and partnerships likewise engaged in the sale and distribution, in interstate commerce, of similar products.

PAR. 2. Durant Motor Company, a Michigan corporation, was formerly engaged, at the city of Lansing, Michigan, in the assembling of parts which it purchased from the manufacturers thereof, into complete cars and in the sale and distribution of such assembled cars under the trade names of "Durant," "Star," and "Rugby" automobiles. In the year 1931, said company was adjudged to be insolvent and a receiver was appointed, who, in disposing of the assets, sold and conveyed to 'Vinslow-Baker-Meyering Corporation all the ~­ assembled parts on hand at the Durant Company's plant. Sal~ Winslow-Baker-Meyering Corporation then entered upon the busi· ness of selling and distributing replacement parts for the three auto- DURANT l\IOTOR CAR CO. 473 467 Findings mobiles named, and advertised the same widely. The parts so sold and distributed consisted, at first, entirely of those purchased from the receiver and turned over at the plant; but as time passed the stock of certain of such parts became depleted, and the selling and distributing corporation began to order new supplies from the manufacturers thereof, until the parts so advertised, sold, and distributed consisted, and now consist, to a substantial extent of parts not derived. from the Durant Company but purchased from other sources. \Vinslow-Baker-Meyering Corporation has now been succeeded by Dallas E. 'Winslow, Inc., and its place of business has been removed from Lansing, Mich., and is now located at Detroit, Mich. PAR. 3. In the course and. conduct of its business as described in paragraph 1 hereof, Dallas E. Winslow, Inc., in soliciting the sale of and selling its said products in interstate commerce, made the following and other similar statements and representations in cata- ~ogues and other advertisements and advertising matter distributed In interstate commerce among customers and prospective customers: Buy only authorized Durant parts direct from the factory. Prices again slashed for genuine Durant parts. By these economies and reductions in materials from our suppliers, we have been able to lower our costs, which In turn has enabled us to again lower om· Parts prices; in some instances to the extent of cutting off over 50% of former (lUotaUons. Every item bas been gone over carefully and all possible reductions lllade. You may therefore rest assured we ha,·e gone our limit in reducing Prices and that you are now buying authorized parts just as cheaply as they can Possibly be sold for. We now take a pardonable pride in making the sratelllent that today Durant owners can buy from us genuine parts for their cars MOREl CHEAPLY TIIAN EVER BEFORE IN DURANT HISTORY. Durant Motor Car Company, Lansing, Michigan.

n W,e've turned the plant upside down to serve you EVEN BETTER THAN EE ORE. Direct from the factory • • • Durant Motor Car Company, Lansing, Michigan.

In one of its catalogues, there appeared a pictorial representation of the large plant which had b<'cn occupied by the Durant :Motor Car. Company prior to its adjudication as a bankrupt, and beneath this, the title: "The Durant factory at Lansing, Michigan." Every replacement part you order is shipped to you from this mammoth plant. We ask your cooperation by purchasing from us ALL parts needed by yo~1, thereby you assist us In maintaining for your benefit, as well as ours, thrs tnosst important and economical direct factory service. e d D n all orders tor Star parts direct to the factory. urant Motor Car Company, Lansing, Michigan. The use of the trade name of "Durant 1\Iotor Car Company" had. and has the tendency and capacity to confuse, mislead, and deceive hurchasers into the ·belief that the corporation using the same is the urant Motor Car Company or the successor of the Durant Motor 474 FEDERAL TRADE COMl\IISSION DECISIONS Order 23F.T.C.

Company, although the bill of sale from the receiver conveying the title to the unused parts did not convey the good will of the Durant Motor Company or the right to use its name; none of the parts so advertised, sold and distributed were manufactured by \Vinslow- Daker-Meyering Corporation, or by Dallas E. Winslow, Inc., nor were a substantial portion of said parts manufactured by Durant Motor Company; and neither said Winslow-Daker-Meyering Corporation nor said Dallas E. Winslow, Inc., owned or operated any factory wherein such parts were fabricated.

PAR. 4. The use of the aforesaid trade name and advertisement hy the respondent as set forth in the foregoing paragraphs has had the capacity and tendency to divert trade to said respondent from competitors. Competition throughout the various States of the United States has been substantially injured by said respondent through the use of or by means of such representations and statements. CONCLUSION The aforesaid acts and practices of respondent under the conditions nnd circumstances described in the foregoing findings are to the prejudice of the public and respondent's competitors and constitute unfair methods of competition in commerce within the intent and meaning of Section 5 of the Act of Congress entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes."

ORDER 1'0 CEASE AND DESIST The respondent, Dallas E. \Vinslow, Inc., a corporation trading as Durant Motor Car Company, having heretofore on December 23, 1935, filed answer herein denying the material allegations of the com· plaint, and, subsequently on the 25th day of August 1930, respondent having filed with the Commission a motion that it be permitted to withdraw said answer and be permitted to file in lieu thereof its substituted answer attached to said motion, and respondent having also executed a stipulation as to the facts in lieu of testimony; and the Commission having duly considered said motion, substituted an· swer and stipulation as to the facts, and being fully advised in the premises;

It is hereby ordered, That the said motion be and the same is hereby granted, that the said answer be and the same is hereby withdrawn, that said substituted answer be, and the same is hereby filed in lieu of said answer so withdrawn.

And the respondent in and by its substituted answer having ad· mitted the allegations contained in the complaint, having consented DURANT l\IOTOR CAR CO. 475 4G7 Order that the Commmission make its findings as to the facts and conclusion from the facts stipulated, and having consented to the entry, issuance, and service upon it of an order to cease and desist from the Ptactices alleged in the complaint; and the Commission being fully advised in the premises and having made its findings as to the facts and conclusion that respondent has violated the provisions of an Act of Congress, approved September 26, 1914, entitled, "An Act to create a Federal Trade Commission, to define its powers and dutiest nnd for other purposes."

It is hereby further ordered, That respondent Dallas E. Winslow, Inc., a corporation trading as Durant Motor Car Company, its offi- ~ers, agents, representatives, and employees in connection with solicit- Ing the sale of and selling its automotive parts and equipment in interstate commerce, do forthwith cease and desist from: " 1. Directly or indirectly using or causing to be used, the trade name Durant .Motor Car Company", or "Durant Motor Company", or any other word or similar combination of words as a trade name for its business.

2. Directly or indirectly using or causing to be used, the word "Durant" in any way which may have the tendency and capacity to confuse, mislead, and deceive purchasers into the belief that the respondent is the successor of the Durant Motor Company. 3. Representing directly or indirectly through ad,·ertisements, or on stationery, invoices, and other printed matter, or in any other way tl~at its automotive parts and equipment are "authorized Durant parts dlte~t from the factory", "genuine Durant parts", "direct fac~ory service", or from employing' similar statements and representations Which may have the tenden~y and capacity to confuse, mislead, and deceive purchasers into the,l;elief that all of the parts so advertised, sold, and distributed are or were derived from the Durant l\Iotor Company.

" 4. Representing directly or indirectly through the use of the word factory" either indepemlently or in conjunction with any other word ' or Words, or with any pictorial representations, in its advertising In:l.tter, or in or through other means that respondent. owns, operates, or. controls any factory wherein its products' are made or f abnca· t e d In any way, when such is not the fact.

It i8 furtl1cr ordered That the respondent shall within 00 days after ser · ' · · t · VIce upon it of this order 1 file with the Comnnsswn a repor 111 Writ' f . } lug setting forth in detail the manner and orm 111 w nc . 1l I't lias co:nlplied with this order.

Complaint 23F.'l'.C.