Topval Corp., et al.

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In the Matrer or TOPVAL CORP. ET AL.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Docket 7007. Complaint, Dec. 26, 1957—Decision, June 28, 1958 Consent order requiring two associated mail order sellers in Lindenhurst, N.Y., of electrical appliances, electric skillets, cooker fryers, and other merchandise, to cease representing falsely in advertising in nationally distributed magazines—frequently in the form of salesmen’s opportunities intended to attract individuals desiring to go into their own mail order discount business—that fictitious and exaggerated amounts were their usual retail or wholesale prices, and that their merchandise had been advertised in Life magazine; and to cease representing falsely, by displaying the names ‘‘General Electric’ and “Westinghouse,” that certain of their products were made by those companies, and by displaying the seals of Good Housekeeping magazine and the United Laboratories, that their products had passed quality and safety tests.

Mr. Harry E. Middleton, Jr., for the Commission. Mr. Michael J. Ryan, of Babylon, N.Y., for respondents. (xwit1aL Decision By Evererr F. Haycrarr, Hearina EXAMINER On December 26, 1957, the Federal Trade Commission issued its complaint against Topval Corp., a corporation, and Kendex Corp., a corporation, and Michael H. Kent, erroneously referred to in the complaint as Michael Kent, and Joseph H. Kent, erroneously referred to in the complaint as Joseph Kent, individually and as officers of said corporations, charging them with the use of unfair and deceptive acts and practices and unfair methods of competition in commerce in violation of the provisions of the Federal Trade Commission Act with reference to electric appliances, including electric skillets, cooker fryers and other merchandise. After the issuance of said complaint, no answer having been filed thereto, the initial hearing was held on March 20, 1958, in New York, N.Y., at which time, before testimony was taken, an agreement for consent order was entered into by and between respondents and counsel supporting the complaint, subject to approval by the Bureau of Litigation, in accordance with section 3.25 of the rules of practice and procedure of the Commission. This agreement was duly approved by the Bureau of Litigation and submitted to the hearing examiner on Apri) 11,1958, together with affidavit executed by Michael H. Kent and Joseph H. Kent which is attached to said agreement and made a part thereof. TOPVAL CORP. ET AL. 1863 1862 Decision By the terms of said agreement, the respondents admitted all the jurisdictional facts alleged in the complaint and agreed that the record may be taken as if findings of jurisdictional facts had been duly made in accordance with such allegations, said agreement disposing of all of this proceeding as to all parties. Respondents in the agreement expressly waived any further procedural steps before the hearing examiner and the Commission; the making of findings of fact or conclusions of law; and all of the rights they may have to challenge or contest the validity of the order to cease ard desist entered in accordance with this agreement.

It was further provided in said agreement that the record on which the initial decision and the decision of the Commission shall be based shall consist solely of the complaint and the said agreement. It was further agreed that the agreement shall not become a part of the official record unless and until it becomes a part of the decision of the Commission, and that said 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. The said agreement also provided that the order to cease and desist issued in accordance. therewith shall have the same force and effect as if entered after a full hearing; that it 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. This proceeding having now come on for final consideration by the hearing examiner on the complaint and the aforesaid agreement for consent order, and it appearing that said agreement provides for an appropriate disposition of this proceeding, the aforesaid agreement 18 hereby accepted and is ordered filed upon becoming part of the Commission’s decision in accordance with sections 3.21 and 3.25 of the rules of practice; and in consonance with the terms of said agreement, the hearing examiner makes the following jurisdictional findings and order:

1. Respondents Topval Corp. and Kendex Corp. are corporations existing and doing business under and by virtue of the laws of the State of New York with their office and principal place of business located at 174 East Montauk Highway, Lindenhurst, N.Y. The individual respondents Michael H. Kent and Joseph H. Kent are officers of the corporate respondents and have their office and principal place of business at the same address as the corporate respondents.

2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents hereinabove named. The complaint states a cause of action against said respondents L864 FEDERAL TRADE COMMISSION DECISIONS Order 54 FTC.

under the Federal Trade Commission Act and this proceeding is in the interest of the public.

ORDER It is ordered, That respondents, Topval Corp., a corporation, and its officers, and Kendex Corp., a corporation, and its officers, and Michael H. Kent and Joseph H. Kent, individually and as officers of said corporations, and respondents’ agents, representatives and employees directly, or through any corporate or other device, in connection with the offering for sale, sale and distribution of electric ‘skillets, cooker fryers, or other merchandise in commerce, as ‘‘commerce” is defined in the Federal Trade Commission Act do forthwith cease and desist from:

1. Representing, directly or indirectly:

(a) That any amount is the retail price of merchandise when such amount is in excess of the price at which such merchandise is usually and regularly sold at retail;

(b) That any amount is the wholesale price of merchandise when such amount is in excess of the price at which such merchandise is usually and regularly sold at wholesale;

(c) That merchandise has been advertised in Life magazine; or has been advertised in any other magazine or publication, unless such is the fact.

2. Using the name of any company in connection with merchandise which has not been manufactured in its entirety by said company, or representing, directly or indirectly, that merchandise not manufactured in its entirety by a specified company, was so manufactured, provided however, that this prohibition shall not be construed as prohibiting a truthful statement that apart of an article of merchandise has been manufactured by a specified company when the part is clearly and conspicuously identified.

3. Using the Good Housekeeping seal of approval in connection with their merchandise; or representing in any manner that their merchandise, or any article thereof, has been awarded said seal of approval; or that their merchandise, or any article thereof, has been approved by any other group or organization, unless such is the fact.

4. Using the seal of United Laboratories, Inc., in connection with their merchandise; or representing in any other manner that their merchandise or any article thereof, has been approved by said company or that their merchandise, or any article thereof, has been approved TOPVAL CORP. ET AL. 1865 1862 Decision by any other group or organization as to its safety, unless such is the fact.

DECISION OF THE COMMISSION AND ORDER TO FILE REPORT OF COMPLIANCE Pursuant to section 3.21 of the Commission’s rules of practice, the initial decision of the hearing examiner shall, on the 28th day of June 1958, become the decision of the Commission; and, accordingly: It is ordered, That repondents Topval Corp., a corporation, and Kendex Corp., a corporation, and Michael H. Kent, erroneously referred to in the complaint as Michael Kent, and Joseph H. Kent, erroneously referred to in the complaint as Joseph Kent, individually and as officers of said corporations, shall, within sixty (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 the order to cease and desist.