ticular inducement to a customer to buy gum in this manner. Our experiment told us that the board was not designed to operate as simply as this. The seller of that board had something else in mind. The evidence is that when a ball of the off-colored gum was punched out, the merchant would give a prize of some kind to the lucky customer, usually a stick of candy or a candy bar. The number of off-colored balls was printed on the face of the board, and from this information the merchant could determine what value of prize he could afford. The setup was a perfect way to garner children's pennies although the record showed that adults were equally attracted, which reminds us of what the poet said, that "the child is father to the man." Counsel for the petitioner discussed at great length from a sociological point of view, the age-old problem of the gambling instinct in the human being. According to his analysis, gambling pervades our entire economic system; thus insurance contracts are gambles, stock and grain exchange transactions are gambles, and the farmer's dependence on the weather is a gamble. [455] Counsel's attempts to apply this analysis to the present case left us cold and unimpressed. He even reminded us that our great idol, Mr. Chief Justice Marshall in his day attended the horse races and wagered with his clergyman. In fact, they ran a book. As indicating how times have changed, and how even our coarse nature has yielded to the protecting care of governmental policy, we confess we do not even know a bookmaker, clerical or otherwise, and our passes to the beautiful race tracks around Chicago lie in our desk unused. There may be in every child the impulse that prompts him to take a chance, but it has been the public teaching and the public policy of the land that gambling is immoral and to be condemned. The Federal Government has made it a criminal offense to transport lottery tickets or to cause them to be transported in interstate commerce. 18 U.S. C. A. § 387. Lotteries used in the marketing of merchandise have long been condemned by the Supreme Court and by this court. The cases are legion. * In Federal Trade Commission v. R. F. Keppel & Brother, Inc., 291 U. S. 304, 54 S. Ct. 423, 78 L. Ed. 814 [18 F. T. C. 684; 2 S. & D. 259], candy was sold by the piece and if it contained a certain number or legend when broken open, the lucky customer received as a prize another piece of candy, his purchase price, or some other small prize. Of this scheme, the Supreme Court said, "Such devices have met with condemnation throughout the community. * * it is clear that the practice is of the sort which the common law and criminal statutes have long deemed contrary to public policy." In that case the condemned gambling device and the merchandise to be used with it were sold together as a unit. It is clear, under the Keppel case that such a method of merchandising is within the power of the Federal Trade Commission to prohibit by a cease and desist order. The Keppel case, however, does not cover the case at bar because the article sold here, the Ballgum board, is incomplete in itself as a game of chance. No prizes are provided. The board, however, is designed, intended, and conducive to gambling; its use suggests, and was intended to encourage, gambling. Our question then is whether such a method of merchandising is an unfair trade practice contrary to public policy and within the power of the Federal Trade Commission to prohibit by use of a cease and desist order where the article sold is not complete in itself for merchandising by means of a game of chance, but is so devised, planned, and constructed as to encourage and induce its use for this purpose. "The public policy of a state is to be found embodied in its constitution and its statutes, and, when these are silent on the subject, in the decisions of its courts." The Illinois Bankers Life Association v. Collins, 341 Ill. 548, 551, 173 N. E. 465. Recently we said in Maltz v. Sax, 134 F. (2d) 2, 4, "Moreover, in the absence of any statute condemning gambling as illegal, the Federal courts have consistently condemned it as against public policy." We have also held that those who aid and abet such a method of merchandising, those participes criminis with gamblers and their schemes, are likewise engaged in unfair trade practices contrary to public policy. Jaffe v. Federal Trade Commission, 139 F. (2d) 112 [37 F. T. C. 816; 3 S. & D. 610]; Koolish v. Federal Trade Commission, 129 F. (2d) 64 [34 F. T. C. 1863; 3 S. & D. 492]; Maltz v. Sax, supra. The device used in the case at bar is too apparently allied with the purpose of merchandising by gambling to appeal to a court as being a fair trade practice, particularly designed as it is to appeal to children's trade and to appease their desire to get something for nothing. It is clear that the Federal Trade Commission has the power to eradicate merchandising by gambling in interstate commerce. We think the Commission also has the power to prohibit the distribution in interstate commerce of devices intended to aid and encourage merchandising by gambling. The gamblers and those who deliberately and designedly aid and abet them are both engaged in practices contrary to public policy. Merchandising by gambling should not be divided into insulated acts, which appear innocent when examined separately. This unfair practice should be viewed as a whole. If the Federal Trade Commission is to police merchandising by gambling, it must police those who designedly and deliberately aid and abet this practice. We think the Commission has such power. The petition to review is denied. J. E. TODD, INC., v. FEDERAL TRADE COMMISSION 1 No. 8608-F. T. C. Dock. 4549 (United States Court of Appeals, District of Columbia. Nov. 27, 1944) EVIDENCE-CEASE AND DESIST ORDERS-METHODS, ACTS AND PRACTICES—MISREPRESENTATION-QUALITIES OR PROPERTIES OF PRODUCT-MEDICINAL PREPARATION-IF SUPPORTING EXPERTS, UNLIKE OPPOSING, WITHOUT CLINICAL EXPERIENCE THEREWITH. Substantial evidence supported finding of Federal Trade Commission that petitioner's product had no value in treatment of arthritis, neuritis, rheumatism, or similar diseases, and justified order requiring petitioner to cease advertising that its product had value in treatment of such diseases, notwithstanding experts who gave testimony supporting the finding had no clinical experience with the product and the opposing experts had such experience. 1 Reported in 145 F. (2d) 858, For case before Commission, see 37 F, T. C. 492. EVIDENCE-EXPERT TESTIMONY-QUALITIES OR PROPERTIES OF PRODUCT-MEDICINAL PREPARATION-GENERAL MEDICAL AND PHARMACOLOGICAL KNOWLEDGE AS SUFFICIENT BASIS FOR. General medical and pharmacological knowledge is sufficient basis for experts' testimony that product had no value in treatment of arthritis, neuritis, rheumatism, or similar diseases. PROCEDURE AND PROCEEDINGS BEFORE COMMISSION-FINDINGS-IF MODIFIED AFTER ORDER WITHOUT REISSUING LATTER. Where two months after cease and desist order was issued Federal Trade Commission slightly modified its findings but modified findings supported the order, the modified findings did not vitiate the order or require the formality of reissuing it. (The syllabus, with substituted captions, is taken from 145 F. (2d) 858) On petition for review of order Commission, affirmed. Mr. John A. Nash, of Washington, D. C., with whom Mr. Horace J. Donnelly, of Washington, D. C., was on the brief, for petitioner. Mr. Robert P. Bellinger, member of the Bar of the Supreme Court of South Carolina, of Washington, D. C., pro hac vice, by special leave of Court, with whom Mr. W. T. Kelley, Chief Counsel, Federal Trade Commission, and Mr. Joseph J. Smith, Jr., Assistant Chief Counsel, both of Washington, D. C., were on the brief, for respondent. Mr. J. Wallace Nichol, of Washington, D. C., also entered an appearance for respondent. Before GRONER, Chief Justice, and EDGERTON and ARNOLD, Associate Justices. Per Curiam: This is a petition to review an order of the Federal Trade Commission which requires petitioner to cease advertising that its product has value in the treatment of arthritis, neuritis, rheumatism or similar diseases. For the petitioner, two osteopathic physicians testified before the Commission that they had treated hundreds of patients with this product; that it had effected cures in severe cases of arthritis; and that its curative properties were due mainly to its olibanum content. For the Commission, a chemist testified that it contained at most a trace of olibanum; and three doctors of medicine, two of whom were specialists in the treatment of arthritis, testified that its ingredients, including olibanum, alone or in combination, had no value in relation to arthritis, neuritis or rheumatism. The Commission so found. The supporting evidence is substantial though the experts who gave it had no clinical experience with the product and the opposing experts had such experience. General medical and pharmacological knowledge is a sufficient basis for such testimony as the Commission's experts gave. John J. Fulton Co. v. Fed. Trade Comm., 130 F. (2d) 85 (C. C. A. 9) [35 F. T. C. 946; 3 S. & D. 499], cert. denied 317 U. S. 679; Neff v. Fed. Trade Comm., 117 F. (2d) 495 (C. C. A. 4) [32 F. T. C. 1842; 3 S. & D. 332]; Justin Haynes & Co. v. Fed. Trade Comm., 105 F. (2d) 988 (C. C. A. 2) [29 F. T. C. 1578; 3 S. & D. 134], cert. denied 308 U. S. 616. Two months after the order was issued the Commission slightly modified its findings of fact. Since the modified findings support the order they do not, as appellant contends, vitiate it or require the formality of reissuing it. Affirmed. LEKAS & DRIVAS, INC., v. FEDERAL TRADE COMMISSION 1 No. 5-F. T. C. Dock. 4815 (Circuit Court of Appeals, Second Circuit. Nov. 30, 1944) CEASE AND DESIST ORDERS-METHODS, ACTS AND PRACTICES-MISREPRESENTATION— QUALITIES OR PROPERTIES OF PRODUCT. Evidence supported Federal Trade Commission's finding that petitioner's advertising matter was substantially false and misleading with respect to claims for olive oil sold by it, justifying issuance of cease and desist order. CEASE AND DESIST ORDERS-EXTENT-MISREPRESENTATION-QUALITIES OR PROPERTIES OF PRODUCT. Where the evidence did not support a finding that olive oil is wholly useless or even substantially useless as a laxative, an order directing petitioner to cease and desist from advertising the olive oil as a laxative was modified by permitting a claim to be made that it had a possible slight value as a laxative. (The syllabus, with substituted captions, is taken from 145 F. (2d) 976) On petition to review order of Commission, order modified, and, as modified, affirmed. Mr. Henry Ward Beer and Mr. Hyman L. Goldstein, both of New York City, for petitioner. Mr. R. P. Bellinger, Sp. Atty., Mr. W. T. Kelley, Chief Counsel, and Mr. Joseph J. Smith, Jr., Asst. Chief Counsel, all of Washington, D. C., for respondent. Before L. HAND, AUGUSTUS N. HAND, and CHASE, Circuit Judges. The petitioner's advertising matter very clearly implied that olive oil would of itself make people healthy; specifically that it would prevent, or tend to prevent, appendicitis, gall stones, and bladder infections. Also that it had the vitamins A. E. and F. in substantial quantities; that it would cure skin irritations, neuralgia and rheumatism; stimulate the complexion and "tone up" the organs. According to the only witness sworna competent physician-all these claims were substantially false. It has no therapeutic value whatever except as a carrier for operative drugs; and except also that it possibly has some slight value as a laxative. It is a pure fat and therefore does have value as food, but the comparison made by the petitioner of olive oil with dried, or fresh, meats was wholly misleading. As a skin lubricant it may be of benefit when used in massage, but no more than any other lubricant. Its content of vitamins A. and E. is negligible, and there is no such thing as vitamin F. It is not a "tonic," in whatever sense that term may be used. All this appeared without contradiction, and was ample to support the findings and the order save in one particular. The Commission has the burden of proof, and, as we have already indicated, the testimony does 1 Reported in 145 F. (2d) 976. For case before Commission, see 37 F. T. C. 9. 639680m 47-48 not support a finding that olive oil is wholly useless, or even substantially useless, as a laxative. All that the expert would say about that was that its use was "slight, if any"; moreover, his later testimony was at least consistent with its having value for purposes of "elimination." For this reason we think that the order: Article I (a), should be supplemented by this suffix: "except a possible slight value as a laxative." Order modified as above indicated, and, as modified, affirmed. JACOB SIEGEL COMPANY v. FEDERAL TRADE COMMISSION 1 No. 8407-F. T. C. Dock. 3403 (Circuit Court of Appeals, Third Circuit. Nov. 30, 1944) Substantial evidence supported decision of Federal Trade Commission that the name "Alpacuna," applied to coats containing a combination of alpaca, mohair, and wool fibers on a cotton backing, was misleading and deceptive implying that coats contained vicuna fiber, and authorized cease and desist order. - FINDINGS OF COMMISSION WHERE - IF TESTIMONY RELIED ON PREJUDICED OR APPELLATE PROCEDURE AND PROCEEDINGS - Where there is substantial evidence to support finding of Federal Trade Commission, Circuit Court of Appeals may not intervene even if Commission relies upon prejudiced or biased testimony. METHODS, ACTS AND PRACTICES MISREPRESENTATION WHETHER SECONDARY MEANING. TRADE NAMES - "AL Evidence was insufficient to establish a secondary meaning of "vicuna" as a soft finish on cloth or a soft fabric, as distinguished from primary meaning of a fabric containing vicuna animal fiber, and did not require reversal of Federal Trade Commission's determination that name Alpacuna as applied to soft fabric coats which contained no vicuna fiber was misleading. FEDERAL TRADE COMMISSION ACT-SECTION 5 - THAT FINDINGS OF COMMISSION, AS TO FACTS, IF SUPPORTED BY TESTIMONY, SHALL BE CONCLUSIVE EVIDENCE CONTEMPLATED. The statute declaring that findings of Federal Trade Commission as to facts if supported by evidence shall be conclusive contemplates substantial evidence. APPELLATE PROCEDURE AND PROCEEDINGS FINDINGS OF COMMISSION-WHERE SUBSTANTIAL SUPPORTING EVIDENCE IF SUBSTANTIAL EVIDENCE TO CONTRARY, ALSO. In proceedings to review order of Federal Trade Commission, that there is a real conflict in testimony with substantial evidence by petitioner contrary to The case is reported in 150 F. (2d) 751. On motion for rehearing, the court, on Sept. 20, 1945, adhered to its decision herein. Certiorari granted Jan. 2, 1946, 66 S. Ct. 337 |