R. H. Best, Inc.

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IN THE ~IA TTER OF R. H. BEST, INC., ET AL.

COXSEKT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COl\Il\IISSION ACT Docket 681~. Complaint Julle 3, 1957-Decision, Oct. S, 1957 Con;;;ent order requiring a concern in Rockville, l\1d., engaged in selling pre-cut houses, buiWilJg materials, home equipment, aoll supplies, and in contratting for the construction of houses and pre-cut houses, to cease repre:-:enting falsely~T in newspnpers aull by circular letters anll catalogs that it was making a bona fide offer to sell and ('onstruct complete houses of speC'ifit: design and size, at a specific price and at c1esignatell saving over the lIsunl cost of a comparnble home; alllorl ~ a variety of false elaims as in the orcler below\v set forth.

1111'. Iiar7'y E. 111iddleton, Jr. for the Commission. Respondents pro se.

INITIAL DECISION BY FRAN~ HIER, I-IEARING EXAMINER Pursuant to the provisions of the Federal Trade Commission Act, the Federal Trade Commission on ~Tune 3 , 1957, issued and subsequently served its complaint in this proceeding against respondents . II. Best, Inc.., a corporation existing and doing business under and by virtue of the la,ys of the State of ~Iaryland, and R. II. Best., indi- ...-idl1ally and as n11 office.er of the corporate respondent. The office.e and princ.ipal place of the business of said respondents is at 15~15 Rock- ,-ille Pike, in the City of Roekville, State of ~1aryla.nd. On .August 16, 1957, there was submitted to the undersigned hearing examiner an agreement between respondents and counsel supporting the complaint providing for the entry of a consent order. By the. terms of said agreement., responde.nts admit all the jurisdictional facts alleged in the c.omplaint and agree that the record may be taken as if findings of jurisdictional facts had been duly m:::.de in acr.orc1nnce "it h such a1Jegations. By such agreement, respondents aide any further procedural steps before the hearing examiner and the Commission; waive the making of findings of fact and conclusions of la,,; and "aive all of the rights they may have to challenge or c.contest. the. validity of the order to cease and desist entered in ac.r.orda.nce "ith this agreement.

Such agreement. further provides that it disposes of all of this proceeding- as to an parties and that there is no provision in the order respecting the char~e relating to the use of the term "custom R. H. BEST, INC., ET AL. 417 416 Decision buile' as set out in Paragraph Four 7 of the complaint or relating to that part of Paragraph Four 8 of the complaint concerning the use of the statement that "other loaning agencies are in favor of our program and they make. . . conventional loans more willingly and in Jarger amounts than on houses built for sale. . Such agreement further provides that as to the matter referred to in Paragraph Four 7 of the complaint, counsel states that respondents have supplied him with evidence indicating that most or all of the houses built by them are actually "custom built" as that term is commonly understood. As to the matters referred to in Paragraph Four 8 of the complaint counsel states that there is evidence which he belie,' es to be reliable, that loaning agencies do in fact favor programs of the type respondents have and do in fact make loans more willingly on such housing programs and in larger amounts than in the ease of houses built for sale. A separate provision covering the use of the expression "predetermined price" is not included in the order as it is believed that the use of this expression is adequately covered in other provisions of the order.

Such agreement further provides that. the record on which this ini1i:11 decision and the decision of the Commission shall be based shall consist solely of the complaint and this agreement; that the latter shall not become a part of the official record unless and until it become.s a part of the decision of the Commission; that the agreement is for settlement purposes only and does not constitute an admission by respondents that they have violated the law as alleged in the complaint; and that the following order to cease and desist may be entered in this proceeding by the Commission without further notice to respondents, and, ",hen so entered, it shall have the same force and effect as if entered after a full hearing, and may be altered modified, or set aside in the manner provided for other orders; and that the complaint may be used in construing the terms of the order. The hearing examiner having considered the agreement and proposed order, and being of the opinion that they provide an appropriate basis for settlement and disposition of this proceeding, the agreement is hereby accepted, the follo,,-ing jurisdictional findings made, and the following order issued.

1. Respondent R. I-l. Best, Inc., is a corporation existing and doing business under and by virtue of the laws of the State of J\larylanc1 with its office and principal place of business located at 1545 Roc1\:viJJe Pike, H,ockville, l\laryland. The individual respondent R. H. Best is an officer and director of said corporate respondent and has as his principal pln.ce of business the same address as the corporate respondent.

,., 418 FEDERAL TRADE CO~fMISSION DECISIONS Decision 54 F.

2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents, and the proceeding is in the public interest.

ORDER t is ordered That respondents R. H. Best, Inc., a corporation and its officers and R. H. Best, individually and as an officer of said corporation, and respondents' representatives, agents and employees directly or through any corporate or other device in connection with the offering for sale, sale, or distribution of precut houses, building materials, home equipment, and supplies in commerce, as "commerce is defined in the Federal Trade Commission Act, do forthwith cease and desist from representing:

1. That they are making a bona fide offer to sell, and construct complete houses of specific design and size, unless such be the fact. 2. That such houses are being offered for sale at a specific price unless such be the fact.

3. That a designated amount of money will be saved from the normal and usual cost of buying and building a house of comparable size and design when purchasing one of their advertised houses. 4. That a customer may have a $19 000 house (or equal) for little as $13 000.

5. That the customer can reduce the advertised price of the house if he does part of the work himself, unless such be the fact. 6. That only the finest grade of lumber is used in the construction and is guaranteed to be of the finest quality. 7. That the Government is in favor of respondents' program or that it makes FHA or VA loans more willingly and in larger amount ts than on houses built for sale. DECISION OF TI-IE COl\:Il\IISSION AND ORDER TO FILE REPORT OF COMPLB..NCE Pursuant to Sec. 3.21 of the Commission s Rules of Practice, the initial decision of the hearing examiner shall, on the 3rd day of October, 1957, become the decision of the Commission; and, accordingly:

It is ordered That the respondents herein shall, within sixty (60) days after serviee upon them of this order, file with the Commission a report in writing setting forth in detaail the manner and form which they have complied with the order to cease and desist. FEDERAL FIRE PROTECTION SERVICE , INC., ET AL. 419 Decision