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Federal Trade Commission v. Midwest Mills Inc.

June 15, 1937

FEDERAL TRADE COMMISSION
v.
MIDWEST MILLS, INC.



On Application for Enforcement of an Order of the Federal Trade Commission.

Author: Evans

Before EVANS and MAJOR, Circuit Judges, and LINDLEY, District Judge.

EVANS, Circuit Judge.

After investigation and hearing the Federal Trade Commission entered an order directing respondent to cease and desist representing itself as a manufacturer or mill owner by the use of its corporate name "Mid West Mills, Inc." The part of the order of which complaint is made reads as follows:

"It is ordered that the respondent, Mid West Mills, Inc., a corporation, its officers, agents, representatives, servants, and employees, in connection with the offering for sale and sale of upholstering fabrics, wooden frames, padding, felt, springs, and all other such material, relative to the construction of furniture, in interstate commerce, cease and desist from:

"Representing, directly or indirectly, through and by use of its corporate or trade name, through letterheads, circulars, advertising literature, or in any other manner, that it is a manufacturer, mill operator, or mill owner."

Petitioner is here with an application to enforce its cease and desist order which respondent has refused to obey.

Petitioner's order is largely based upon the respondent's use of the word "Mills" in its corporate name, because it is suggestive, if not indicative, of a fact which does not exist, namely, that respondent owns and operates mills where its goods are manufactured. Respondent admits it has no mills and manufactures none of the goods which it sells, yet it denies that it thereby violates any unfair trade practices such as are designated by section 5 of the Federal Trade Commission Act (as amended, 15 U.S.C.A. ยง 45).

Respondent is a jobber and wholesaler of upholstering fabrics, wooden frames, padding, felt, springs, etc., and all materials used in the construction of furniture. It sells through salesmen in Illinois and other states and is in substantial competition with others engaged in like business. It urges that any possibility of deception through the use of the word "Mills" in its corporate name is overcome by the fact that all the garment labels, tickets, letterheads, invoices, and other printed matter (except envelopes) contain the words "Jobbers and Converters" directly under its corporate name.

In 1922, respondent's president purchased the good will of a defunct corporation, including its name "Mid West Mills, Inc.," and he caused to be formed another corporation by the name of "Mid West Mills Supply, Inc." which name was changed to "Mid West Mills, Inc." in 1927. It conducted a gross business of $525,000 in 1934, and $550,000 in 1935.

We reproduce the names as they appear on letterheads, envelopes, and ticket and garment labels.

Letterhead:

MID WEST MILLS, ...


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