stances set forth, to constitute unfair methods of competition. (F. 17. Same. Giving and offering to give, on the part of a concern In the following cases (F. T. C. 103-105) involving substantially O'Neil Oil & Paint Co., Chas. R. Long, jr., Co., Columbus Varnish Co., Walter L. 18. Same. Giving and offering to give, on the part of a cor- 19. Same.-Paying and offering to pay, on the part of a cor- petition. (Twin City Varnish Co., of Illinois, 1 F. T. C. 190, and The Royal Varnish Co., 1 F. T. C. 194.) 20. Same. Giving and offering to give, on the part of a corporation engaged in the manufacture and sale of printers' rolls and kindred products, gratuities, entertainment, and presents to the employees of customers and of competitors' customers, as an inducement for them to influence their employers to purchase its goods or to refrain from dealing with its competitors, held, under the circumstances set forth, to constitute an unfair method of competition. (The Printers Roll Co., 1 F. T. C. 240; D. H. Donegan, doing business under the name and style of the American Printers Roll Co., 1 F. T. C. 244.) 21. Same. Giving and offering to give, on the part of a corporation engaged in the manufacture and sale of engine packing, to employees of its customers and competitor's customers, in some instances without the knowledge and consent of their employers, sums of money as an inducement for them to influence their employers to purchase its goods or to refrain from dealing with its competitors, held, under the circumstances set forth, to constitute an unfair method of competition. (Stewart-Dixon & Co., (Inc.), 1 F. T. C. 331.) 22. Same. Giving and offering to give, on the part of a concern engaged in the manufacture and sale of soap and kindred products, to employees of customers and of competitors' customers, without the knowledge and consent of their employers, gratuities, including money and other things of value, as an inducement to influence their employers to purchase its goods or to refrain from dealing with its competitors, held, under the circumstances set forth, to constitute an unfair method of competition. (C. R. Fenton and F. P. Fenton copartners, styling themselves Standard Soap Manufacturing Co., 1 F. T. C. 480, and Rome Soap Manufacturing Co., 1 F. T. C. 484). (c) OF GOVERNMENT. 23. As inducement to influence them to purchase goods of donor.Giving and offering to give, by an employee of a corporation engaged in the sale or distribution of fire extinguishers and similar products, who had been an employee of a concern handling competitive goods, to employees of the United States interested in the purchase of goods for the Government, gratuities, such as liquors, cigars, meals, theater tickets, and other presents, as an inducement to influence them to purchase goods of the donor corporation, held, under the circumstances set forth, to constitute an unfair method of competition. (Allen Sale Service (Inc)., C. Louis Allen, and Wm. H. Yetman, 1 F. T. C. 459.) II. BRIBING OFFICERS OF VESSELS. 24. To secure good will and patronage and as an inducement to In the following cases involving substantially the same set of facts, Geo. D. Flood and W. H. Calvert, partners, styling themselves Flood & Calvert, Other cases not reported in full but listed in 3 F. T. C. 208 and 222, Gulf Iron & Machine Co. (Inc.); T. J. Anderson, doing business as Seaboard Trans- COMMISSION WITHOUT JURISDICTION, IN- Appeals were taken from the orders of of the commission, the court did not pass Knapp, circuit judge said: "We see no without jurisdiction, because the business carried on by the petitioners, and with which the condemned practices are connected, is neither interstate nor foreign commerce. And this conclusion makes it unnecessary to consider the other grounds upon which the invalidity of the Commission's order is asserted." (D. A. Winslow et al v. F. T. C., 277 Fed. 206; Norden Ship Supply Co. v. F. T. C., 277 Fed. 206.) IN GENERAL-THE LAW DOES NOT PERMIT AN AGENT WHEN ACTING FOR HIS PRINCIPAL TO DO ANYTHING IN CONFLICT WITH PRINCIPAL'S INTERESTS. "Any agreement or understanding between one principal and the agent of another, by which the said agent is to receive a commission or reward if he will use his influence with his principal to induce a contract, or enter a contract for his principal, is pernicious and corrupt and cannot be enforced at law. This principle is founded upon the plaintiff's principle of reason and morality and has been sanctioned by the courts in innumerable cases." (City of Findlay v. Pertz et al., 66 Fed. 427; Alger v. Keith, 105 Fed. 105.) "The law upon questions of public policy, demands the utmost loyalty from agent to principal at all times, and does not permit an agent by reason of his personal interests or otherwise, to assume an attitude in conflict with the very best interests of his principal." (Union Central Life Insurance Co. v. Berlin, 90 Fed. 779.) THE BRIBERY OF EMPLOYEES FOR THE PURPOSE OF INFLUENCING BUSINESS HAS LONG BEEN REGARDED, BY VIRTUE OF STATUTORY ENACTMENT AND NUMEROUS DECISIONS AT COMMON LAW, AS FRAUDULENT AND AS OPPOSED TO GOOD MORALS AND PUBLIC POLICY. See Commonwealth S. S. Co. v. American Shipbuilding Co., 197 Fed. 780; Palmer v. Doull Miller Co., 233 Fed. 309; U. S. v. Lynch, 256 Fed. 984; Hanson v. Barnard, 270 Fed. 162 & 165; U. S. v. Carter, 217 U. S. 286; Crocker v. U. S., 240 U. S. 74; Alger v. Anderson. 78 Fed. 729. Judge Clark, in delivering the opinion of the court in the latter case, said: "The agent is not allowed, by a gift, commission, or other form of compensation, to assume an attitude in conflict with the very best interests of his principal. It is a relation which, on the ground of public policy, demands the utmost loyalty to the principal at all times." In delivering the opinion in the case of Robertson v. Chapman, 152 U. S. 673, Mr. Justice Harlan said: "While this agency continues, he (the agent) must act in the matter of such agency solely with reference to the interests of his principal. The law will not permit him, without the knowledge and assent of his principal, to occupy a position in which he will be tempted not to do the best he may for the principal." NOT NECESSARY FOR PRINCIPAL TO SHOW FRAUD OR LOSS. "It is immaterial if that appears whether the complainant was able' to show any specific abuse of discretion, or whether it was able to show that it had suffered any actual loss by fraud or otherwise. It is not enough for one occupying a confidential relation to another, who is shown to have secretly received a benefit from the opposite party, to say, 'You cannot show any fraud or you cannot show that you have sustained any loss by my conduct.' Such an agent has the power to conceal his fraud and hide the injury done his principal. It would be a dangerous precedent to lay down as law that, unless some affirmative fraud or loss can be shown, the agent may hold on to any secret benefit he may be able to make out of his agency." U. S. v. Carter, 217 U.S. 305. ENTERTAINMENT AND GRATUITIES ΤΟ CUSTOMERS AND EMPLOYEES OF CUSTOMERS NOT A MATTER OF PUBLIC POLICY AS TO BE WITHIN JURISDICTION OF FEDERAL TRADE COMMISSION. "The practice of a company engaged in interstate commerce in entertaining employees of its customers with liquor, cigars, meals, theater tickets, etc., is not a matter so affecting the public as to be within the jurisdiction of the Federal | concerning a matter liable to injuriously Trade Commission. "The court takes judicial notice that the practice of entertaining customers and employees of customers has been an incident of business from time immemorial, especially as expenditures for such purposes are recognized as a proper deduction by the income tax regulations.” (Syllabus.) (New Jersey Asbestos Co. v. Federal Trade Commission, 264 Fed. 509.) PROCEEDINGS BY FEDERAL TRADE COMMISSION WILL NOT BE ENJOINED GIFTS OR ALLOWANCES TO EMPLOYEES OF CUSTOMER WITHOUT KNOWLEDGE OF EMPLOYER, HELD UNFAIR. On denying a motion for a preliminary injunction to enjoin the Federal Trade Commission, etc., from prosecuting a complaint against complainants District Judge Waddill (fourth circuit) said: "While, undoubtedly, the relief sought may sometimes be afforded by injunction, still it does not seem to the court the proper remedy here, where the enforcement of the orders sought to be enjoined is exclusively within the jurisdiction of the circuit court of appeals. (Wilson v. Lambert, 168 U. S. 611, 618, 18 Sup. Ct. 217, 442 L. Ed. 599.) From this court's action, as well in refusing as granting an injunction an appeal lies direct to that court and it, or a judge thereof would doubtless stay proceedings sought to be enjoined, where the appeal was from an order refusing an injunction, if in the judgment of the court such action should be necessary to meet the ends of justice. * * * "For the reasons stated, the court, be- | ing further of opinion that the commission acted entirely within its rights of and affect commerce, doth incline to grant the injunction prayed for." (T. C. Hurst & Son v. Federal Trade Co., 268 Fed. 874.) BONUS TO BREAK CONTRACT WITH COMPETITORS. The practice of giving bonuses as an inducement for the recipient to break his contract with a competitor of giver, was condemned by a decree entered in the following case: U. S. v. Central-West Pub. Co. (consent decree).--Decrees and Judgments in Federal Antitrust Cases, 362. SECURING INFORMATION CONCERNING BUSINESS OF COMPETITOR BY BRIBING HIS EMPLOYEES. The inducing or hiring of employees or other persons to obtain information concerning the business of competitors was condemned in a final decree in the fol lowing case: U. S. v. Bowser & Co. (consent decree).—Decrees and Judgments in Federal Antitrust Cases, 587. BONUS GIVEN TO INDUCE PRICE MAINTENANCE. The practice of giving bonuses as an inducement to the recipient to maintain prices was condemned by a decree of injunction issued in the following Case: U. S. v. Southern Wholesale Grocers Assn. (consent decree) (207 Fed. 434).--Decrees and Judgments in the Federal Antitrust Cases, 249. CURRENT ARTICLES AND DISCUSSIONS. Report of committee of the American Bar Association on commerce, trade, and commercial bribery. American Bar Assn. Journal, 364, July, 1919. BUSINESS METHODS OF COMPETITORS. [See Advertising falsely and misleadingly.] BUYING OUT COMPETITORS. [See Clayton Act, sec. 7.] |