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HONG KONG EXPORT CREDIT INS. CORP. v. DUN & BRADST

December 29, 1975

HONG KONG EXPORT CREDIT INSURANCE CORP., Plaintiff,
v.
DUN & BRADSTREET, Defendant


Levet, District Judge.


The opinion of the court was delivered by: LEVET

LEVET, District Judge.

The defendant here has moved pursuant to Rule 50(a) of the Federal Rules of Civil Procedure for a directed verdict of dismissal as to all five of plaintiff's claims:

 One, as to the breach of the subscription agreement; two, as to the so-called breach of the cabling agreement; three, negligence; four, gross negligence and five, fraud.

 Under Rule 50(a) such a motion will be granted only where there is an absence of controverted issues of fact. In Brady v. Southern Railroad, 320 U.S. 476, 64 S. Ct. 232, 88 L. Ed. 239 (1943), the Supreme Court announced the standard in the following terms:

 "When the evidence is such that without weighing the credibility of witnesses there can be but one reasonable conclusion as to the verdict, the Court should determine the proceeding by non-suit, directed verdict or otherwise in accordance with the applicable practice without submission to the jury, or by judgment notwithstanding the verdict. By such direction of the trial the result is saved from the mischance of speculation over legally unfounded claims."

 First, I consider the so-called subscription contract; that is, for a breach of the so-called subscription contract.

 Plaintiff alleged that defendant breached this agreement by its failure to timely mail the special notice of July 22, 1970 which described the $585 suit and attachment against Belcrest. As proof of defendant's failure to timely mail this report, plaintiff offered evidence that the report was not received by it until November 1970. This evidence was in the form of plaintiff's date stamp on the report and testimony that it was plaintiff's business practice to date stamp all incoming mail as it was received.

 The Court is of the opinion that plaintiff has met its initial burden of proof of failure to mail and has thereby shifted to defendant the burden of going forth with the evidence of proof of mailing. If defendant offers, as counsel has indicated, no direct evidence of mailing then the question as to when the report was mailed remains for the jury to determine. Whether any such failure to timely mail constitutes a breach of the contract by reason of its amounting to gross negligence, as I shall later instruct you, is also a question of fact for the jury's determination.

 Therefore, the Court denies defendant's motion for dismissal of plaintiff's claim of breach of the written subscription agreement.

 Secondly, the so-called cabling agreement.

 In the instant case, plaintiff alleges that an oral contract was entered into with defendant to supply plaintiff with information by cable. This has become known as the "cabling agreement."

 Plaintiff contends that proof of the existence of this oral contract and its terms has been proved by the testimony of Mr. Hill and by several memoranda and letters offered into evidence.

 Mr. Hill testified that he had carried on discussions with the defendant, in person, to provide a means of cabling adverse information to plaintiff. This first meeting, according to Hill, took place in the middle of 1969 (See page 113 of the transcript).

 Messrs. Kane, Hight and Duncan were present at this meeting on behalf of the defendant. However, the major part of this meeting consisted of a discussion between Mr. Kane and Mr. Hill. Mr. Hill prepared a memorandum of his meeting with Kane (Exhibit 7).

 Quoting from that document, Mr. Hill wrote:

 "I discussed a number of possibilities with them, including their cabling to us adverse information such as the filing of petitions under Chapters X and XI of the Bankruptcy Act."

 This meeting between Hill and Kane was followed up by an exchange of correspondence between the parties. These are contained in Exhibit 8. The first letter, dated May 29, 1969, was from Mr. Kane to Mr. Hill and it states:

 "We are studying the possibility of transmitting bankruptcy information by cable."

 A response to this letter, dated September 26, 1969, was sent by Hill to Kane. It states:

 "I wonder whether you have reached any conclusions about the possibility of transmitting bankruptcy information to us by cable."

 The last letter in this series, dated October 16, 1969 (Exhibit 8), was sent by Kane to Hill. It states:

 "Regarding the transmission of bankruptcy information to you by cable, we plan to experiment with this through one of our international service consultants."

 Another in-person meeting was held between the defendant and Mr. Hill. This time defendant was represented by Mr. Adamson, president of Dun & Bradstreet International. Hill prepared a memorandum of this meeting (Exhibit 9). Paragraph (e) of that memorandum stated:

 "He noted that we were in the process of trying to establish with D & B New York a system under which adverse information on buyers on whom we have requested reports within the last ...


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