Harris, Robert A., Jr

Text (OCR of the scan at left; may contain errors)

IN THE MATTER OF CHARLES F. UNRUH AND RODERT A. HARRIS, JR.l TRADING AS C. F. UNRUH BROKERAGE COMPANY CO~lPLAD!T, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SUBSEC. (c) OF SEC. 2 OF AN ACT OF CONGRESS APPROVED OCT. 1~, Hl14, AS AMENDED BY AN ACT OF l'O:-IGRESS APPROVED Julie 19, 1936 Docket 4283. Com.pla,int, Aug. 29, 19W-Decision, N01'. 30, 1940 Where two individuals engaged in Virginia, as field brokers, in acting !IS agents of sellers in transactions of sale and purchase of canned fruits and vegetables between sellers thereof and j,,],!Jers, wholesalers, retail chain ~;stores, anrl other purchasers and in effecting, in some inst11nces !IS thus engaged, sale:-~ of such commodities for sellers through corresponding or local brokers employed by them to assist them in making such sales, and in other instances in effecting s1lles of such commodities for sellers to purchasers directly, 11nd pursuant to which sales, whether effected by said individuals through aid of such corre!'pomling or local b•·okers, or directly, commodities thus sold were shipped and transported by sellers thereof across State lines to respective purchasers, and as thus engaged, in compensating such corresponding or local brokers in former cases through payments to such brokers of certain percentage, usually 50 percent of the brokerage fee or commission paid by sellers to them for services iu connection with such sales and usually amounting to 4 percent of the purchase p1·ice paid by the purchaser for such commodities- ( a) Granted and allowed, in connection with the !-<Hies of !'Uch commodities In Interstate commerce etl'ected by them for sellers to purchasers directly, brokerage fees and commissions or allowances and discounts in lieu thereof, in substantial amounts, to such purchasers and amounting, usually, to 50 J)('recent of the brokerage fee or commission paid by the sellers to them fot· services in connection with such sales, or allowance or discount In lieu thereof:

Held, 'that in granting and allowing b•·okerage fees and commissions or allowances and discounts In lieu thereof to purchasers in connection with their respective purchases of commodities from sellers as above set forth, said indidduals violated prodsions of Section 2 (c) of the Clayton Act as amended by the Robinson-Patman Act; and 'Vhere said Individuals, Pngnged in buf;illef;s of purchasing canned fruit anll vegetables for their own account for resale to jobbers, wholesalers, retail chain stores and other purchasers, and as thus engaged in making many purchases of such commodities from sellers located in other States and pursuant to which purchases said commodities were shipped and transported by sellers from the respective States in which they were located across State lines, either to said Individuals or, pursuant to instntctlons and directions from them, to the respective purchasers to whom such commodities had b<'t'n resold by said lndhlduals, and in also making ruuny purchases of such commodities!-1 for their own a<'count as afot·esald from sellers loeuted in ~tate of Virginia, by whkh sl'llers, pursuant to instructions and dlrPCtlons from 1mid lndh·ldmll)<, commodities thus purrhul't'd were caused to be shlppl'll Complaint 31F.T.C.

and transported from said State across State lines to the respective purclJasers to whom said commodities had been resold by them; (b) Received and accepted from sellers brokerage fees and commissions, or allowances and discounts in lieu thereof, in substantial amounts, in connection with the purchases of such commodities by said individuals for their own account in interstate commerce as above set forth; and (c) Granted and allowed brokerage fees and commissions, or allowances and discounts in lieu thereof, in substantial amounts, to the purchasers of Ruch commodities bought by said individuals for their own account and resold, as aforesaid, to purchasers located in other States and pursuant to which sales they caused such commodities to be shipped and transported across State lines to such purchasers:

Held, That in receiving and accepting brokerage fees and commissions, or allowances and discounts in lieu thereof, from sellers upon their purchases of commodities, and that in granting and allowing brokerage fees and commissions or allowances and discounts in lieu thereof to purchasers upon the resale of commodities as respectively above set forth, said individuals violated the provisions of section 2 (c) of the Clayton Act as amt>nded by the Robinson-Patman Act.

Mr. John Darsey, for the Commission.

Complaint The Federal Trade Commission having reason to believe that the parties respondent named in the caption hereof, and hereinafter more particularly designated and described, since June 19, 1936, have violated and are now violating the provisions of subsection (c) of section 2 of the Clayton Act, as amended by the Robinson-Patman Act, approved June 19, 1936 (U. S. C., title 15, sec. 13), hereby issues its complaint, stating its charges with respect thereto as follows:

PARAGRAPH 1. Respondents Charles F. Unruh and Robert A. Harris, Jr., are individuals trading as C. F. Unruh Brokerage Co. with their principal office and place of business located in Kinsale, Va. Respondents are engaged in the business of field brokers, acting as agents of sellers in transactions of sale and purchase of canned fruits and vegetables between sellers thereof and jobbers, wholesalers, retail chain stores, and other purchasers. In some instances sales of such commodities are effected for sellers by respondents through brokers, commonly known as corresponding or local brokers, who are employed by respondents to assist them in making such sales. In other instances sales of such commodities are effected for sellers by respondents to purchasers directly. PAR. 2. For services rendered to sellers in connection 1••ith the sale of such commodities in each of the manners set forth in paragraph 1 hereof, respondents receive from sellers a brokerage fee or com- C. F. UNRUH BROKERAGE CO. 1559 1557 Complaint mission, usually 4 percent of the purchase price paid by the purchaser for such commodities.

In the instances where sales of such commodities are effected for sellers by respondents through corresponding or local brokers, a certain percentage, usually 50 percent, of the brokerage fee or commission paid by sellers to respondents for services in connection with such sales is granted and allowed by respondents to such corresponding or local brokers for brokerage services rendered to respondents in connection with such sales.

In the instances where sales of such commodities are effected for sellers by respondents to purchasers directly, a certain percentage, usually 50 percent, of the brokerage fee or commission paid by the sellers to respondents for services in connection with such sales, or an allowance or discount in lieu thereof, is granted and allowed by respondents to such purchasers.

PAR. 3. In the course and conduct of their said business since June 19, 1936, respondents have effected sales of such commodities for sellers in each of the manners set forth in paragraph 1 hereof to purchasers located in States other than the State in which the respective sellers of such commodities are located, pursuant to which sales such commodities have been shipped and transported by the sellers thereof across State lines to the respective purchasers thereof. PAR. 4. Since June 19, 1936, in connection with sales of such commodities in interstate commerce as aforesaid, which sales were effected for sellers by respondents to purchasers directly as set forth in paragraph 2 hereof, respondents have granted and allowed brokerage fees and commissions or allowances and discounts in lieu thereof in substantial amounts to such purchasers.

PAR. 5. Respondents are also engaged in the business of purchasing canned fruits and vegetables for their own account for resale to jobbers, wholesalers, retail chain stores, and other purchasers. Since June 19, 1936, respondents have made many purchases of such commodities for their own account for resale as aforesaid from sellers located in States other than the State of Virginia pursuant to which purchases such commodities have been shipped and transported by sellers from the respective States in which they are located across State lines either to respondents· or, pursuant to instructions and directions from respondents, to the respective purchasers to whom such commodities have been resold by respondents. Since June 19, 1936, respondents have also made many purchases of such commodities for their own account as aforesaid from sellers located in the State of Virginia, which sellers, pursuant to instructions and directions from respondents, have caused the commodities 296516m-41-vol. 31-101 Findings 31F.T.C.

so purchased by respondents to be shipped and transported from the State of Virginia across State lines to the respective purchasers to whom such commodities have been resold by respondents. PAR. 6. Since June 19, 1936, in connection with the purchases of such commodities by respondents for their own account in interstate commerce as set forth in paragraph 5. hereof, respondents have received and accepted from sellers brokerage fees and commissions orallowances and discounts in lieu thereof in substantial amounts. PAR. 7. Since June 19, 1936, respondents have resold such commodities purchased for their own account as set forth in paragraph 5 hereof to purchasers located in States other than the State of Virginia, pursuant to which sales respondents have caused such commodities to be shipped and transported across State lines to such purchasers.

Since June 19, 1936, in connection with the resale of such commodities in interstate commerce as aforesaid, respondents have granted and allowed brokerage fees and commissions or allowances and discounts in lieu thereof in substantial amounts to the purchasers of such commodities.

PAR. 8. The granting and allowing of brokerage fees and commissions or allowances and discounts in lieu thereof by respondents to purchasers in connection with their respective purchases of commodities from sellers as set forth in paragraph 4 hereof; the receipt and acceptance of brokerage fees and commissions or allowances and discounts in lieu thereof from sellers by respondents upon the purchases of commodities by the respondents as set forth in paragraph 6 hereof; and the granting and allowing of brokerage fees and commissions or allowances and discounts in lieu thereof by respondents to purchasers upon the resale of commodities by respondents as set forth in paragraph 7 hereof are in violation of subsection (c) of section 2 of the Clayton Act, as amended.

REPORT, FINDINGS AS TO THE FACTS, AND ORDER Pursuant to the provisions of an Act of Congress entitled "An Act to supplement existing laws against unlawful restraints and monopolies and for other purposes" approved October 15, 1914, the Clayton Act, as amended by an Act of Congress approved June 19, 1936, the Robinson-Patman Act (U. S.C. title 15, sec. 13), the Federal Trade Commission on the 20th day of August 1940, issued and served its complaint in this proceeding upon the respondents named in the caption hereof, charging them with violation of the provisions of subsection (c) of section 2 of the said act.

C. F. UNRUH BROKERAGE CO. 1561 1557 Findings On October 8, 1940, the respondents filed their answer, admitting all the material allegations of fact set forth in said complaint, waiving all intervening procedure and further hearings as to said facts and waiving the filing of briefs and presentation of oral argument. There- 1\after the proceeding regularly came on for final hearing before the· Commission on the complaint and answer as aforesaid, and the Com-· mission having duly considered the matter and being now fully ad-· vised in the premises, and being of the opinion that section 2 (c) of the Cl!tyton Act as amended by the Robinson-Patman Act, has been violated by the said respondents, now makes this its findings as to the facts and its conclusion drawn therefrom.

FINDINGS AS TO THE FACTS PARAGRAPH 1. Respondents Charles F. Unruh and Robert A. Harris, Jr., are individuals trading as C. F. Unruh Brokerage Co., with their principal office and place of business located in Kinsale, Va. Respondents for a number of years have been engaged in the business of field brokers, acting as the agents of sellers in transactions of sale and purchase of canned fruits and vegetables between sellers thereof and jobbers, wholesalers, retail chain stores, and other purchasers. In some instances sales of such commodities have been effected for sellers by the respondents through brokers, commonly known as corresponding or local brokers, who have been employed by the respondents to assist them in making such sales. In other instances sales of such commodities have been effected for sellers by respondents to purchasers directly.

PAR. 2. For the services rendered to sellers in connection with the sale of such commodities in each of the manners set forth in paragraph 1 hereof, respondents have received from sellers a brokerage fee or commission, usually 4 percent of the purchase price paid by the purchaser for such commoditi£>.s.

In the instances where sales of such commodities have been effected for sellers by the respondents through corresponding or local brokers, a certain percentage, usually 50 percent of the brokerage fee or commission paid by sellers to the respondents for services in connection with such sales has been granted and allowed by the respondents to such corresponding or local brokers for brokerage services rendered to the respondents in connection with such sales. In the instances where sales of such commodities have been effected for sellers by respondents to purchasers directly, a certain percental!e, usually 50 percent of the brokerage fee or commission paid by the !<ellers to the respondents for services in conn£>ction with such sal£>s, Findings 31F.T.C.

or an allowance or discount in lieu thereof, has been granted and allowed by the respondents to such direct purchasers. PAR. 3. In the course and conduct of their said business since June 19, 1936, the respondents have effected sales of such commodities for sellers in each of the manners set forth in paragraph 1 hereof to purrhasers located in States other than the State in which the respective sellers of such commodities are located, pursuant to which sales such commodities have been shipped and transported by the sellers thereof across State lines to the respective purchasers thereof. . PAR. 4. Since June 19, 1936, in connection with sales of such commodities in interstate commerce as aforesaid, which sales were effected for sellers by the respondents to purchasers directly as set forth in })aragraph 2 hereof, the respondents have granted and allowed brokerage fees and commissions or allowances and discounts in lieu thereof in substantial amounts to such purchasers.

PAR. 5. Respondents for a number of years have also been engaged in the business of purchasing canned fruits and vegetables for their own account for resale to jobbers, wholesalers, retail chain stores, and other purchasers.

Since June 19, 1936, the respondents have made many purchases of such commodities for their own account for resale as aforesaid from Eellers located in States other than the State of Virginia, pursuant to which purchases such commodities have been shipped and transported by sellers from the respective States in which they are located across State lines either to the respondents or, pursuant to instructions and directions from the respondents, to the respective purchasers to whom such commodities have been resold by the respondents. Since June 19, 1936, the respondents have also made many purchases of such commodities for their own account as aforesaid from sellers located in the State of Virginia, which sellers, pursuant to instructions and directions from the respondents, have caused the commodities so purcha.sed by the respondents to be shipped and transported from the State of Virginia across State lines to the respective purchasers to whom such commodities have been resold by the respondents.

PAR. 6. Since June 19, 1936, in connection with the purchases of such commodities by the respondents for their own account in inter- ~tate commerce as set forth in paragraph 5 hereof, the respondents have received and accepted from sellers brokerage fees and commissions or allowances and discounts in lien thereof in ·substantial amounts.

PAR. 7. Since June 19, 1936, the respondents have resold such eommodities purchased for their own account as set forth in para· C. F. UNRUH BROKERAGE CO. 1563 1557 Order graph 5 hereof to purcha:sers located in States other than the State of Virginia, pursuant to which sales the respondents have caused such commodities to be shipped and transported across States lines to such purchasers.

Since June 19, 1936, in connection with the sale of such commodities in inter:state commerce as aforesaid, the respondents have granted and allowed brokerage fees and commissions or allowances and discounts in lieu thereof m substantial amounts to the purchasers of such commodities.

CO:SCLUSION In granting and allowing brokerage fees and commissions or allowances and discounts in lieu thereof to purchasers in connection with their respective purchases of commodities from sellers as set forth in paragraph 4 hereof; in receiving and accepting brokerage fees and commissions or allowances and discount~S in lieu thereof from sellers upon their purchases of commodities as set forth in paragraph 6 hereof and in granting and allowing brokerage fees and commission or allowances and discounts in lieu thereof to purcha~Sers upon the resale of commodities as set forth in paragraph 7 hereof, the respondents have violated the provisions of section 2 (c) of the Clayton Act as amended by the Robinson-Patman Act. ORDER TO CEASE AND DESIST This proceeding having been heard by the Federal Trade Commission upon the complaint of the Commi:ssion and the answer of the respondents named in the caption hereof, in which answer said respondents admit all the material allegations of fact set forth in said complaint, and state that they waive all intervening procedure and further hearing as to said facts, and the Commission having made its findings as to the fact"$ and its conclusion that the said respondents have violated the provisions of section 2 (c) of the Clayton Act, as amended by the Robinson-Patman Act, approved June 19, 1936 (U.S. C. title 15, sec. 13).

It i.s orae1'ea, That in connection with sal81S of commodities in interstate commerce effect~d for sellers by re,spondents in the capacity of field brokers, and in connection with the resale in inrorstate commerce of commodities purchased by respondents, the said. respondents Charles F. Unruh and Robert A. Harris, Jr., trading under the name C. F. Unruh Brokerage Co., or any other name, their agents, employees, and representatives, do forthwith cea~Se and desist from: 1. Granting or making any allowances or discounts in lieu of brokerage to any purchaser in such transactions by selling commodi- Order 31F.T.C.

ties to any of such purchasers at a price reflecting a reduction from the prices at which sales of such commodities,s are currently being effected by respondents to other customers of an amount representing, in whole or in part, brokerage currently being paid by respondents to corresponding or local brokers for brokerage services or sales assi;;tance rendered to respondents in effecting sales of such commodities to other purchasers thereof; and 2. Granting or allowing in any manner or form whatever, directly or indirectly, anything of value as a commission, brokerage, or other compensation or any allowance or discount in lieu thereof to any purchaser in such transactions.

It is further ordered, That in purchasing commodities in interstate commerce, the said re-spondents Charles F. Unruh and Robert A. Harris, Jr., trading under the name C. F. Unruh Brokerage Co., or any other name, their agents, employees anu representatives, do forthwith cease and desist from:

1. Making purchases of commodities for respondents' own account at a price or on a basis which reflects a deduction or reduction, or is arrived at or computed by deducting or subtracting, from the prices at which sellers are selling commodities to other purchasers thereof any amount representing or reflecting, in whole or in part, brokerage currently being paid by sellers to their brokers on sales of commodities made for said sellers by, or by said 15ellers through, their said brokers; and 2. Accepting from sellers in any manner or form whatever, directly or indirectly, anything of value as a commission, brokerage, or other compensation or any allowance and discount in lieu thereof upon purchases of commodities made for respondents' own account. It is further ordered, That the respondents named in the caption hereof shall, within 30 days after service upon them of this order, file with the Federal Trade Commission a report in writing, .setting forth in detail the manner and form in which they have complied with this order.

C. G. REABURN AND CO. 1565 Syllabus