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CONRAIL v. HUDSON CEMENT CORP.

UNITED STATES DISTRICT COURT, SOUTHERN DISTRICT OF NEW YORK


July 21, 1981

CONSOLIDATED RAIL CORPORATION, Plaintiff,
v.
HUDSON CEMENT CORPORATION, a Division and/or Subsidiary of Colonial Sand & Stone Co., Inc., Defendant

The opinion of the court was delivered by: DUFFY

MEMORANDUM AND ORDER

Plaintiff brought this breach of contract action to recover freight charges allegedly due and owing by the defendant. On May 4, 1981, I denied plaintiff's motion for summary judgment and granted defendant's cross-motion on the basis of a general release given by the plaintiff to the defendant. 513 F.Supp. 910. Plaintiff now moves for reargument.

Plaintiff admits that it gave the defendant a general release in exchange for moneys paid in settlement of claims raised in a prior discontinued action for unpaid freight charges and for certain other open bills not sued on in that action. Plaintiff's Memorandum at 6. Plaintiff, however, apparently believes that I upheld the general release only because I thought it had been given as a part of a judicially supervised settlement of the prior action. Plaintiff now argues that the general release was mistakenly given in a private transaction between the plaintiff and defendant and, thus, is no defense in an action to recover freight charges. I disagree.

 Plaintiff does not claim that its agent did not know the effect of a general release, but rather that he was unaware of the freight charges sued for in this action at the time he executed the release. The nature of a general release, however, should have caused the agent to inquire further into the claims between the parties. His failure to do so does not render a general release invalid. Nor does the absence of court supervision of a general release affect its binding character. It is sufficient to say that when, as here, a general release is voluntarily given to the defendant by the plaintiff in exchange for legal consideration, it is valid and binding.

 Plaintiff also argues that the general release is void by express statutory mandate of the Interstate Commerce Act ("ICA"). The ICA, however, does not stand in the way of judicial economy where the goal of avoiding rate discrimination is not violated. See Chicago Northwestern Railway Co. v. O. N. Lindell, 281 U.S. 14, 50 S. Ct. 200, 74 L. Ed. 670 (1930). There is no evidence that this case involved rate discrimination and, thus, a private settlement via a general release is entirely appropriate.

 Accordingly, after reviewing all the papers submitted in connection with this motion, I adhere to my original decision wherein plaintiff's motion for summary judgment was denied and defendant's cross-motion was granted.

 SO ORDERED.

19810721

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