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Dura Electric Lamp Co. v. Westinghouse Electric Corp.

November 8, 1957


Author: Goodrich

Before GOODRICH, STALEY and HASTIE, Circuit Judges.

Opinion of the Court

By GOODRICH, Circuit Judge: This is an appeal from a judgment for the defendant rendered on motion for summary judgment in an antitrust case. The basis for the district court's ruling was that the plaintiff had given a valid and unconditional release to one of the parties to a joint tort and that this release discharged the obligation of all.

It appears that plaintiff in this case had, at the conclusion of a government action against important producers in the incandescent electric lamp industry, started a suit against General Electric Company naming Corning Glass as a coconspirator. This suit was dismissed by the plaintiff upon receiving a payment of $50,000 from General Electric and giving to the defendant a general release. Subsequently the plaintiff brought action against the defendants named here, alleging conspiracy under the Sherman and Clayton Acts and naming as coconspirators General Electric and Corning Glass Works but not naming them as defendants.

The single question for decision here is whether the release given by the plaintiff in the General Electric suit bars the action against alleged coconspirators.

The plaintiff says this question is to be settled by federal law and federal law is in its favor. We are not so sure that what we have here is a federal law question. The right is created under federal law, true. But whether subsequent things which the plaintiff has done destroys the right is not necessarily a federal law question. Cf. Bank of America v. Parnell, 352 U.S. 29 (1956), reversing, 226 F.2d 297 (3d Cir. 1955). But see Stella v. Kaiser, 221 F.2d 115 (2d Cir.), cert. denied, 350 U.S. 835 (1955). See also Mishkin, The Variousness of "Federal Law": Competence and Discretion in the Choice of National and State Rules for Decision, 105 U.Pa.L.Rev. 797 (1957).We do not need to decide that issue because we think by either route the plaintiff cannot now recover.

The common-law rule on the subject was perfectly clear. It is accurately expressed in Restatement, Torts, § 885(1) (1939) as follows:

"(1) A valid release of one tortfeasor from liability for a harm, given by the injured person, discharges all others liable for the same harm, unless the parties to the release agree that the release shall not discharge the others and, if the release is embodied in a document, unless such agreement appears in the document."

Some of the applications of the rules have been severely criticized by law teachers. See Prosser, Torts, 1107-11 (1941). Much of this criticism, however, has come from refusal of courts in some instances to give effect to language reserving rights against parties not released or in interpreting language sounding in terms of a covenant not to sue as a general release.*fn1 Here we have no such complication. The document of release, which sounds as though it had been taken from an old form book, is as broad as all out of doors and typical of the wasteful use of words in the English language in which lawyers sometimes indulge. It is set out verbatim in the margin because it is the heart of the case but setting it out does not carry the court's approval of it as a piece of English composition.*fn2

It is to be noted that the language of the release is as general as language can be. There is nothing by which it may be interpreted as a covenant not to sue. There is nothing which even hints at a reservation of rights.There is nothing in the facts here which looks to a reexamination of the release based upon fraud or mutual mistake or anything of the sort. Michael Rose Productions v. Loew's Inc., 143 F.Supp. 606 (S.D.N.Y. 1956); McDermott v. Botwick, 38 N.J. Super. 528, 119 A.2d 776 (App. Div. 1956). The transaction was one conducted between lawyers so we do not have an instant where a court may strive to extricate an uninformed layman from the consequences of a hasty settlement.As the court below said at the conclusion of the argument upon the motion for summary judgment, "[If] there ever was [a] case ... which seems to come within the confines of the general rule that release of one tortfeasor is a release to all, this is it." That is our view also.

The New Jersey authorities are clear in their enunciation of the common-law rule as to the effect of a release as applied to a situation like this.See, e.g., Moss v. Cherdak, 114 N.J.L. 332, 176 Atl. 333 (E. & A. 1935); cf. Aliian v. Ben Schlossberg, Inc., 8 N.J. Super. 461, 73 A.2d 290 (App. Div. 1950).So, too, we think are the federal cases. See, e.g., Combined Bronx Amusements v. Warner Bros. Pictures, 132 F.Supp. 921 (S.D.N.Y. 1955); Solar Elec. Corp. v. General Elec. Co., Civil No. 14157, W.D. Pa., Oct. 2, 1957; cf. Stella v. Kaiser, 218 F.2d 64, 68 (2d Cir. 1954); Save Elec. Corp. v. General Elec. Co., Civil No. 7146, N.D. Ohio, March 28, 1957.

One more point should be noted. There is an affidavit by the president of the plaintiff company which figures in the district court proceedings. This affidavit does not claim that the company was lured into making this settlement. It simply says that it was not the intention of the president to release all claims against other conspirators. We think this affidavit does not change the application of the rule. When a man uses words which have a given legal effect he is bound by that effect in the absence of fraud or mistake none of which there is here. Combined Bronx Amusements v. Warner Bros. Pictures, supra; Save Elec. Corp. v. General Elec. Co., supra; Restatement, Torts § 885, Com. d (1939); 3 Williston, Contracts § 647 (rev. ed. 1936).

The judgment of the district court will ...

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