People v. Chas. E. Austin, Inc., Motion No. 254.

• Decision Date: 18 May 1942
• Docket Number: Motion No. 254.
• Citation: 3 N.W.2d 841,301 Mich. 456
• Parties: People v. CHAS. E. AUSTIN, Inc., et al.
• Court: Michigan Supreme Court

301 Mich. 456

3 N.W.2d 841

People

v.CHAS. E. AUSTIN, Inc., et al.

Motion No. 254.

Supreme Court of Michigan.

May 18, 1942.

Charles E. Austin, Inc., a Michigan corporation, and another were arraigned on an information for false advertising and unfair discrimination in the sale of petroleum products. From an order overruling accuseds' motion to quash the information, accuseds appeal.

Reversed in part, and affirmed and remanded in part.

Appeal from Recorder's Court of Detroit; Donald Van Zile, judge.

Before the Entire Bench.

John P. O'Hara and Lewis J. Weadock, both of Detroit (John F. Wagner, of Detroit, of counsel), for appellants.

Thomas Read, Atty. Gen., William E. Dowling and Duncan C. McCrea, Pros. Attys., and Ralph E. Helper and William L. Brunner, Asst. Pros. Attys., all of Detroit, for appellee.

NORTH, Justice.

These defendants were arraigned in the recorder's court of Detroit on an information charging violation of sections 33 and 555 of the 1931 Michigan Penal Code. See Pub.Acts 1931, Act No. 328, §§ 33 and 555 (Stat.Ann. §§ 28.222 and 28.823). Defendantants' motion to quash on grounds hereinafter noted was denied. The trial court granted a stay, and leave having been obtained, defendants have appealed.

In so far as the charge against defendants is laid under section 33 of the Michigan Penal Code, which penalizes false advertising, appellants' counsel contends that advertising ‘Joy Gasoline’ sold by appellants as ‘Grade number one gasoline’-‘Saves four cents' was not in violation of the statute ‘because no standard or grade criterion is established by law’. We quote the material portion of the information: ‘(Defendants) being engaged in the distribution and sale of petroleum products, to-wit: gasoline, known as Joy Gasoline, did make, publish, disseminate, circulate and place before the public, certain posters, signs and advertisements regarding certain merchandise, namely, gasoline, more particularly known as Joy Gasoline, offered for sale, by them, the said Charles E. Austin Company, a Michigan corporation, and Margret Austin, to the public in the City of Detroit, County of Wayne and State of Michigan as follows: ‘Grade number one gasoline’-‘Saves four cents', which posters, signs and advertisements contained asscrtions, representations and statements that were untrue, deceptive and misleading, in that the said gasoline was not Grade One Gasoline and the public did not save four cents on Grade One Gasoline, because said gasoline was not Grade One Gasoline; contrary to the form of the statute in such case made and provided, and against the peace and dignity of the People of the State of Michigan (citing § 33, Michigan Penal Code 1931).’

The testimony taken before the examining magistrate is in the record on this appeal. An expert witness testified that for the purpose of determining its grade he had made tests of the ‘Joy Gasoline’; and after testifying that as established throughout the United States by the Bureau of Standards gasoline is classified as (1) Grade A-1 or premium gasoline, (2) Second grade or regular gasoline, and (3) a Third grade gasoline, this expert testified that his laboratory test ‘put this (Joy) gasoline in the bracket of the third class'.

We cannot accept the contention in appellants' brief that by advertising ‘Joy Gasoline’ in the manner noted there was merely an attempt at ‘puffing’ the product sold; and since that is no offense it is asserted the charge in this respect should have been dismissed. Instead, we think it was a question of fact for trial determination whether the advertising statements used were so used with the intent to deceive the purchasing public as to the grade of ‘Joy Gasoline’ as tested by standards commonly applied to gasoline and the standards on the basis of which gasolines are listed in the Jobber's Manual. As we held in Jasnowski v. Judge of Recorder's Court, 192 Mich. 139, 158 N.W. 229, 230: ‘In any given case it would be a question of fact whether the representation of fact in the advertisement was unture, deceptive, or misleading.’

It is not essential to prosecutions under this statute that a standard or grade criterion should be established by law. It is sufficient if in fact there are established standards or grades commonly known to the trade in the particular commodity; and this record contains testimony to that effect. The examination before the magistrate was sufficient to justify binding defendants over for trial, and the information aptly charges violation of the statute which penalizes false advertising.

Appellants strenuously urge that section 555 of the Michigan Penal Code is unconstitutional. The pertinent portion of this section reads: ‘Sec. 555. Unfair discrimination in sale of petroleum products-Any person doing business in the state, and engaged in the production, manufacture or distribution of any petroleum products, who shall intentionally, for the purpose of destroying the business of a competitor in any locality, discriminate between different sections, communities or cities of this state, by selling such commodity at a lower rate in one section, community or city, than is charged for said commodity by said party in another section, community or city, after making due allowance for the difference, if any, in the grade or quality and in the actual cost of transportation from the point of production, if a raw product, or from the point of manufacture, if a manufactured product, shall be guilty of a misdemeanor * * *.’

The plase of the information charging an offense under the above-quoted section sets forth that defendants being engaged in the distribution and sale of petroleum products, to-wit: gasoline known as Joy Gasoline, did intentionally, for the purpose of destroying the business of a competitor in the city of Detroit, discriminate between different sections and communities by selling such gasoline at a lower rate in one section or community than they charged for the same gasoline in...