Bilt-Rite Box Corporation

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IN THE MATTER OF BILT-RITE BOX CORPORATION, AND JACOB GLEKEL AND JACOB PRESS, INDIVIDUALLY AND AS OFFICERS THEREOF COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE ALLEGED VIOLATION OF SEC. 15 OF AN ACT OF CONGRES"3 APPROVED SEPT. 26, 1914 Docket 4171. Complaint, July 10, 1940-Decision, Oct. 15, 1941 Where a corporation, engaged in the interstate sale and distribution of corrugated paper garment boxes and shipping containers, and its president' and treasurer who formulated, directed, and controlled its policies, acts and practices; in letterheads, invoices and other printed matter distributed to customers and prospective customers- Represented that it owned, operated or controlled the plant or factory wherein its said products were manufactured, through such statements, in connection with Its corporate name, as "Manufacturers of Corrugated Boxes and Shipping Containers" and "Manufacturers of Cloak, Suit, Dress, and Fur Shipping Containers";

Facts being 1t purchased all of its said products from manufacturers, who delivered to it "knock-down" boxes, 1. e., products in which all the scoring, creai!ing, trimming and slotting had been done by the manufacturer, and it merely set up the parts of the boxes and stitched or stapled them together, and was not, as represented, a manufacturer, from whom a portion of the purchasing public prefers to buy direct as, in its belief, enabling it to avoid the middleman's profit and obtain a more uniform line of mer· chandise;

With eflect of misleading and deceiving purchasers into believing that it actually owned and operated or controlled the plant or factory wherein, and machinery whereby, Its products were made, and to purchase substantial amounts of Its said products on a count of such erroneous beliefs: Held, That such acts and practices Wre all to the prejudice and injury of the public and competitors, and constituted unfair and deceptive acts and practices in ccmmerce.

Before Mr. Lewis 0. Russ-ell, trial examiner. Mr. B. G. 1Vilson for the Commission.

Mr. Louis I!· Solomon, of New York City, for respondents. Complaint Pursuant to the provisions of the Federal Trade Commission Act and by virtue of the authority vested in it by said act, the Federal Trade Commission having' reason to believe that Bilt-Rite Dox Corporation, a corpor~tion, jacob Glekel and Jacob Press, indiv!~als, hereinafter refer-ed to as respondents, have violated the provlSlons of said act, and it appearing to the Commission that a proceeding Complaint 33F.T.C.

by it in respect thereof would be in the public mterest, h£>r£>by issues ~ts complaint stating its charges in that respect as follows. PAMGRAPH 1. Respondent, Bilt-Rite Box Corporation, is a corporation organized, existing and doing business under and by virtue of the laws of the State of New York with its office and principal place of business at 242 'Vest Forty-first Street, New York, N. Y.; Jacob Glekel and Jacob Press are, respectinly, presid£>nt and treasurer of !>aid corporate respondent and have their business offices at the same address of said Bilt-Rite Box Corporation. Respondents, Jacob G lekel and Jacob Press, as officers of said cor- ·poration, formulate, control, and direct the policies, nets, and practices thereof. Respondents act together and in cooperation with each other in doing the acts and things hereinaft~r alleged. Respondents are now, and for some time last past hare be£>n, engaged in the business of selling and distributing paper boxes, more especially designated as corrugated gam1ent boxes and shipping containers, m commerce between and among various States of the United States and the District of Columbia.

Respondents cause and have caused said products, when sold, to be shipped from their aforesaid place of business, in the city of New York, State of New York, to purchasers thereof located in various other States of the United States and in the District of Columbia.

PAR. 2. In the course and conduct of th£>ir business as aforesaid, respondents, in soliciting the sale of, and in selling, their products as above described, have caused letterheads, invoices, and other printed matter to be distributed through the United States mails and by other means to customers and prospective customers located in States other than the State of New York and in the District of Columbia. Among and typical of said statements and representations are the following:

BIT.T-RITE ROX CORPORATI08 1\Ianufuctul'ers of Corrugated Garment Boxes and Shipping Containers Bllt-RITE BOX CORPORATION Manufacturers of Cloak, Suit, Dress and Fur Shipping Containers The use of the word "manufacturers'' on respondents' lett£>rh£>afls, invoices and other printed matter serves as a representation that re:"pondents own, operate, or control the plant or factory wherein, or machinery whereby, the products th£>y sell are made or manufactured.

BILT-RITE BOX CORP., ET .AL. 1489 1487 Findings PAR. 3. In truth and in fact, respondents do not own, operate, or control, and have not owned, operated, or controlled a plant, factory or machinery for the manufacture of the products which they sell and distribut\1 as hereinabove alleged, but respondents have filled and now fill orders for such articles of merchandise with products which are made or manufactured. in a plant or factory or by machinery which they neither own, operate, nor control. PAR. 4. There is a preference on the part of certain purchasers and prospective purchasers located in the various States of the United States, for buying said products and like or similar products directly front the manufacturer or factory producing the same. There is an impression and belief existing among certain of said purchaset·s ot· prospective purchasers of said products that by purchasing directly from the manufacturer a saving of the middleman's profit may be obtained; that a more uniform line of merchandise may be purchased, and that other advantages may be obtained by :purchasing goods directly from a manufacturer or plant operator. PAR. 5. The use by respondents of the word "manufacturers" contained in its advertising matter as hereinabove alleged has the tendency and capacity to mislead and deceive, and has misled and deceived, pmchasers and prospective purchasers by causing them to mistakenly and erroneously believe that the respondents actually own and operate or control the plants or factories wherein, or the machinery whereby, said products are made or manufactured, and to purchase substantial amounts of respondents' products on account of such mistak€n and erroneous belief.

PAR. 6. Tho aforesaid acts and practices of respondents as herein alleged are all to the prejudice of the public and constitute unfair and deceptive acts and practices in commerce within the intent and meaning of the Fed€ral Trade Commission Act. REPORT, FINDINGS AS TO THE FACTS, AND ORDER Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission, on the loth day of July, A. D., 194:0, issued and thereafter served its complaint in this proceeding upon the respondents nameJ. in the caption hereof, charging them with unfair nnd deceptive acts and practices in commerce in violation of the provi:>ions of said act. After the issuance of the complaint and the filing of respondents answer thereto, testimony and other eviJ.ence in support of, and in opposition to, the allegations ~f ~he complaint were introduced by the attorneys for the Comnusswn und the attor·ney for respondent before Lewis C. Russell, a duly Findings 33F.T.C.

appointed trial examiner of the Com~ission designated by it to ~erve in this proceeding, and said testimony and other evidence were duly recorded and filed in the office of the Commission. Thereafter, the proceeding regularly came on fo:r final hearing before the Commission upon the complaint, the answer thereto, the testimony and other evidence, the report of the trial examiner and exceptions thereto, and briefs in support of, and in opposition to the complaint; and the Commission having duly considered the matter and being now 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. Respondent, Bilt-Rite Box Corporation, is a corporation existing under the laws of the State of New York. Respond- ~nt Glekel is president of respondent corporation and respondent Jacob Press iR its treasurer. The principal place of business of the J·respondents is located at 242 ·west Forty-first Street, in the city and State of New York.

PAR. 2. Th(l corporate respondent, since the date of its incorporation, has been engaged in the business of selling and distributing paper boxes which are designated by the trade as corrugated garment boxes, and shipping containers, and ships or causes its products to be shipped, when sold, from its principal place of business to purchasers thereof located in various States of the United States. Respondents, Jacob Glekel and Jacob Press formulate, direct, and control the policies, acts, and practices of the corporate respondentt and act together in cooperation with each other in doing the things and acts hereinafter set forth.

PAR. 3. The corporate respondent, in the course and conduct of its business as set forth in paragraph 2 hereof, in soliciting the sale of and selling its products, has caused letterheads, invoices, and other printed matter to be distributed to customers and prospective customers located in States other than the State of New York. Among and typical of the statements and representations contained in said literature are the following:

BILT-RITE BOX CORPORATION 1\Ianutacturers ot Corrugated Boxes and Shipping Containers BILT-RITE BOX CORPOI!ATJO~ ~lanutactur{'rs of Cloak, Suit, Dress and Fur Shipping Containers BILT-RITE BOX CORP., ET AL. 1491 1487 Order The corporate respondent., by use of the word "manufacturers," as above stated, represents that it owns, operates, or controls the plant or factory wherein, and the machinery whereby, the products themselves are made or manufactured.

PAR. 4. None of the respondents owns, or has ever owned, operated, or controlled a plant, factory, or machinery for manufacturing the products sold by the corpor.ate respondent. The corporate re- £pondent purchases all of the boxes sold by it from manufacturers who deliver to the respondent what are known as "knock-down" boxes. By this is meant that all the scoring, creasing, trimming, and slotting is done by the manufacturer, and the respondent merely sets up the parts of the boxes and stitches or staples them together, PAR. 5. The railroads demand that all paper shipping boxes bear a certificate stamp stating the name of the manufacturer of the boxes. The Agar Manufacturing Company, from whom the corporate respondent purchased its knock-down boxes, at the request of respondent stamped its boxes with a certificate showing that the boxes were manufactured by the corporate respondent; but because of the action of the Federal Trade Commission in similar cases, it ceased this practice in April1939.

PAR. 6. A portion of the purchasing public prefers to buy directly from manufacturers, because of the belief that by so doing they may avoid the middleman's profit and will obtain a more uniform line of merch!tndise.

PAR. 7. The use by the corporate respondent of the word "manufacturer," as hereinbefore set forth, has a ten.dency and capacity to mislead and deceive, and has misled and deceived purchasers and prospective purchasers of shipping boxes or containers, causing them to erroneously believe that the corporate respondent actually owns and operates or controls the plant or factory wherein, and the machinery whereby, its products are made or manufactured, and to purchase substantial amounts of said respondent's products on account of such mistaken and erroneous beliefs. CONCLUSION The aforesaid acts and practices of the respondents are all t? the prejudice and injury of the public and of respond:nts' .competitors, lind constitute unfair and deceptive acts and practices m co~e;ce within the intent nnd meaning of the Federal Trade Commission Act.

ORDER TO CEASE AND DESIST . This proceeding having been heard b~ t~1e Federal Trade Commis- Sion upon the complaint of the Comm1sslon, the answer of the re- Order 33F. T.C.

spondents, the testimony and other evidence taken before Lewis C. Russell, a duly appointed trial examiner of the Commission designated by it to serve in this proceeding, the report of the trial examiner thereon and the exceptions .to said report, and briefs filed in support of and in opposition to, the complaint, and the Commission having made its findings as to the facts and its conclusion that the respondents have violated the provisions of the Federal Trade Commission Act.

It is ordered, That respondent Bilt-Rite Box Corporation, a corporation, its officers, directors, agents, representatives, and ·employees, and the respondents, Jacob Glekel and Jacob Press, individually and as officers of the Bilt-Rite Box Corporation, directly or through any corporate or other device in connection with the offering for sale, sale, and distribution of paper boxes -or other shipping containers, in commerce as "commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from: Representing in any manner that respondents, or any one or more of them, own and operate or control a plant or factory wherein paper boxes or other shipping containers are manufactured. It is further ordered, That the respondents shall, within 60 days after service upon them of this order, file with the Commission a report in writing, setting forth in detail the manner and form in which they have complied with this order. FOOD SIE'RVIOE EQUIPMENT INDUSTRY, INC., 'ET AL. 1493 Syllabus