ing the letters "A. C. A."; with the result that their tickings were sold as and for those of said corporation, and their customer dealers were en under the circumstances set forth, constituted unfair methods of competition. abled to sell the same more readily Unfair Competition in Sale of Maand to obtain higher prices therefor than they otherwise would have been able to do: Held, That such simulation of a competitor's label, under the circumstances set forth, constituted an unfair method of competition. Where a corporation engaged in the manufacture and sale of paints, varnishes and shellac, varnish substitutes, labeled and sold as "American Shellac," a product which contained, as first made, none, and later only a small proportion, of genuine shellac; with the effect of deceiving purchasers at retail, and with a capacity and tendency to mislead and deceive the trade and the purchasing public, to the injury of competitors who truthfully described their products: Held, That such mislabeling, and such misrepresentation of product, chines Federal Trade Commission V. Prosperity Co., Inc. (No. 381), 6 F. T. C. 290 Where a corporation engaged in the manufacture and sale of garment-pressing machines; for the purpose of inducing purchasers of competitors' machines on the installment plan to violate their contracts and to install and use its own machines in place of said competitors', chasers to apply on the purchase (a) Offered to and did allow purprice of its machines such sums as had theretofore been paid by them on such competing machines; and (b) Offered and agreed to indemnify such purchasers as violated their contracts against any loss which might accrue to them by reason thereof: Held, That such inducing of breach of contract, under the circumstances set forth, constituted an unfair method of competition. Current Business Decisions Resolution Providing for Payment of Officers' Salaries Out of Earnings of Corporation Harlan-Kellioka Coal Co. v. Kelly, Court of Appeals of Kentucky, 262 S. W. Rep. 259 Prior to April 1, 1919, the plaintiff was the president and general manager of the Harlan-Kellioka Coal Co. On that date the company was reorganized and the plaintiff was elected vicepresident. On the same day there was placed upon the minute book of the corporation a resolution fixing the salaries of the officers and providing that the salaries should be paid out of the earnings of the company. In this action against the company one of the items which the plaintiff sought to recover was $3,000, which he alleged the company owed him as salary from April, 1919, to January 1, 1920. A judgment allowing the plaintiff a recovery for that item was reversed upon appeal because it appeared that the company had no net earnings between April 1, 1919, and January 1, 1920, and the court construed the provision that salaries were to be paid out of the earnings of the company to mean that they were to be paid out of the net earnings. Action by W. B. Kelly against the Harlan-Kellioka Coal Co. Judgment for plaintiff, and defendant appeals. Reversed and remanded. Clay & Carter, of Harlan, for appellant. Opinion of the Court, Written by Judge McCandless MCCANDLESS, J.-W. B. Kelly sued the Harlan-Kellioka Coal Co., alleging that it owed him the sum of $5,100 salary, as its president, from November 1, 1917, to April 1, 1919, at the rate of $3,600 per year. In the second paragraph he alleged that from April 1, 1919, to January 1, 1920, he was vice-president of that company on an agreed salary of $4,000 per year, which sum it agreed indebted to him in the sum of $3,000 and promised to pay, and that it was on that item. The company traversed, and pleaded a store account as a counterclaim. At the conclusion of the evidence, the court gave a peremptory instruction for the defendant on the first item. The other issues were submitted to the jury, who returned a verdict for the plaintiff for the $3,000 claimed, and a verdict for defendant for the $250 set up in the counterclaim. The company appeals from the judgment for the $3,000, but no cross appeal is prosecuted, so that the claim set up in the first par Hall, Jones & Lee, of Harlan, for agraph of the petition is now elimappellee. inated. It appears from the evidence that the company was incorporated in October, 1919, its stock being owned by W. B. Kelly, his son, Owen Kelly, and J. J. Creech. Afterwards C. I. Dawson became interested, and the stock was divided equally between Kelly, Creech and Dawson, and this arrangement existed up to April 1, 1919. On that date Dawson and Creech sold their interest to E. T. Kirk, George L. Ballou and C. N. Bolinger, Kirk acquiring one-third of the stock in the company, and Ballou and Bolinger, one-sixth each. During all the time previous to this, Kelly had acted as president and general manager, and Creech as secretary and treasurer. Kelly had been paid as general manager a stipulated salary and had exercised full control of the mine. He also claims that he and Creech had agreed on each receiving a salary of $3,600 a year as president and secretarytreasurer, respectively, though none of this was ever paid. After the reorganization on April 1, 1919, and up to December 31, 1919, Kelly acted as general manager and was paid therefor the sum of $150 per month. On that date he sold all his stock to Kirk and his associates. At the meeting on April 1, 1919, Kirk was elected president, and Kelly, vice-president, Bolinger, secretary, and Ballou, treasurer. In addition to other business the following resolution was placed upon the minute book: "It is ordered by the board of directors that the salary of the president be fixed at $4,000.00 per year, the salary of the vice-president at $4,000.00 per year, the salary of the secretary at $2,000.00 per year, and the salary of the treasurer at $2,000.00 per year, said salaries to be paid out of the earnings of the company." It further appears that during those nine months the company had no net earnings, but, on the contrary, lost something over $10,000, though it has since made money, the amount not being shown. There is nothing in the pleading or proof to show that any of the officers named in the resolution ever performed any services in such offices, or that any part of the salaries were ever paid to any of them. In fact, Kelly does not even plead that he accepted the office or that it was intended for him to perform services in consideration of the salary. On the other hand, it appears that the amount voted as salaries was to be distributed between the stockholders in proportion to the amount of stock held by each, without any reference to service. Further, the concluding language is significant, "Said salaries to be paid out of the earnings of the company." The natural inference is that this meant net earnings, for it is not reasonable to suppose that the directors contemplated a distribution of the corpus under the guise of salaries. They may have anticipated large profits and wished to avoid income tax reports, or they may have undertaken to distribute the earnings as they arose in lieu of dividends; but, in either view, we are of the opinion that it was intended that the salaries, if any, should be paid out of the net earnings of the year during which they accrued, and as there were no net earnings during the year 1919, no such salaries were payable. Such seems to have been the construction given the contract by the parties, as neither claimed any salary during the year. Kirk testifies that this was the understanding of the directors at the time the resolution was adopted, while Kelly's testimony is somewhat different; but the integrity of the record is not attacked, therefore parol evidence is inadmissible to alter or vary its terms. Other questions were raised, but it is unnecessary to make reference to them. Wherefore judgment is reversed, and cause remanded for proceedings consistent with this opinion. Purchaser of Merchandise in Bulk Held Liable to Creditors of Vendor George H. West Shoe Co. v. Lemish, Supreme Court of Pennsylvania, 124 Atl. Rep. 87 David Rosenberg purchased from Lemish & Simpson, who were the owners of a shoe store, all of the merchandise which they had on hand, for $1,800. One of the partners told Rosenberg that there were no outstanding accounts and that the shoes transferred had been paid for in full. An attempt was made to comply with a statute providing that where merchandise is transferred in bulk an accurate inventory must be made, and that a sworn statement setting forth the names and addresses of creditors must also be made. The attempt consisted in the execution of an affidavit, in which the statement was made that the firm "had no creditors," and that the stock on hand "is paid for in full excepting a few sundry bills." No names and addresses or amounts owing to anyone were attached, nor was an accurate inventory of the merchandise made. Rosenberg took possession and sold the goods at a profit of $500. Thereafter creditors of Lemish & Simpson brought this action to have the sale to Rosenberg set aside, because of failure to comply with the statute, to have Rosenberg declared a receiver for the fair value of the property purchased by him, and to compel him to account to the creditors for the true worth thereof. The court found that there had been a failure to comply with the provisions of the statute both as to the making of an inventory and the affidavit. It was held that there were creditors of the vendors whose claims were not satisfied at the time of the transfer, and that the purchaser was not protected from liability in view of the fact that the affidavit was notice to him that there were sundry bills outstanding. The fair value of the property was fixed at $4,000, and to this extent Rosenberg was held liable as receiver of the property. Upon appeal the decree of the court was affirmed. Suit by the George H. West Shoe Co. and others against John H. Lemish and another, trading as the Little Shoe Shop, and David Rosenberg. Decree for plaintiffs, and defendant Rosenberg appeals. Affirmed. Edward Cushman and Samuel Englander, both of Philadelphia, for appellant. Percival H. Granger (of Reber, Granger & Montgomery), of Philadelphia, for appellees. Opinion of the Court, Written by Act both as to the making of an in Judge Sadler SADLER, J.-Lemish & Simpson conducted from October, 1919, to January, 1921, a store in the city of Philadelphia, known as the Little Shoe Shop. One Rosenberg desired to purchase the stock of goods, and after negotiations did on January 18, 1921, buy all of the merchandise on hand for the lump sum of $1,800. One of the partners, who had authority to act for the other, stated to the vendee that there were no outstanding accounts due, and that the shoes transferred had been paid for in full. In an attempt to comply with the provisions of the Bulk Sales Act of May 23, 1919 (P. L. 262; Pa. St. 1920, §§ 784-791), an affidavit was executed before a notary public in which the statement was made that the firm "had no creditors" and that the stock on hand "is paid for in full excepting a few sundry bills." No names and addresses or amounts owing to anyone were attached, nor was an accurate inventory of the stock of merchandise made, as required by the act referred to. The vendee took possession and made sale at auction, receiving about $500 more than the price paid. Later, creditors of the defendants filed this bill, having for its purpose the setting aside of the transaction, because of failure to comply with the statute governing such cases, and asked that the purchaser be declared a receiver for the fair value of all the property bought by him, and that he account to the creditors for the true worth. An answer was filed, and, after hearing, the court found as facts that there had been a failure to comply with the provisions of the Bulk Sales ventory and the affidavit made obligatory by its terms. It also, upon sufficient evidence, held there were creditors of the vendor whose claims were not satisfied at the time of the transfer, and that the purchaser was not protected in view of the clear notice given by the declaration that "there were sundry bills outstanding." The fair value of the merchandise transferred was found to be $4,000, and to this extent the vendee was held liable as receiver of the property which he took over. The purpose of the Act of May 23, 1919, P. L. 262, supplanting that of March 28, 1905, P. L. 62, was to protect creditors against the sale of stock in hand as a whole, to the prejudice of those unpaid, and who could look to the assets alone for the satisfaction of their claims. The Legislature expressly provided for the relief of all parties concerned where the transfer of the merchandise was in bulk. Not only was an accurate inventory showing values required to be made, but a sworn statement setting forth the names and addresses of the claimants, with provision for notice to them so that objection to the transfer could be lodged if deemed advisable. It was also directed that the sale should be void if these provisions were not complied with. The vendee, in case of doubt, was granted permission to pay the purchase price into court, which would make appropriate distribution after hearing. In the present case the buyer pleads protection by reason of the affidavit, which set forth that the only bills outstanding were "sundry” accounts, and he claimed to have been advised that this statement included |