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TAXIN v. FOOD FAIR STORES

September 27, 1961

John TAXIN and Bernard Taxin, trading as John Taxin Co.
v.
FOOD FAIR STORES, INC., et al.



The opinion of the court was delivered by: WOOD

This is a private antitrust suit brought by John and Bernard Taxin against numerous defendants. Answering the complaint, all of the defendants pleaded a general release wherein the Taxins, for a consideration of $ 18,000 paid in cash to their counsel, released the defendants from liability for all claims under the antitrust laws or otherwise which the Taxins might have had against them on or before March 28, 1958, the date of the release. Replying to this affirmative defense, the plaintiffs admitted the execution of the release, but pleaded that it had been obtained by a fraudulent promise made by Food Fair to the Taxins whereby Food Fair promised to purchase from the Taxins $ 500,000 worth of produce per year.

The promise was allegedly made at a meeting which occurred on February 5, 1958, at which only a few of the defendants were actually present. In fact, the plaintiffs did not allege that Samuel P. Mandell, or his two companies, Samuel P. Mandell Co., Inc., and Mandell Distributing Co., Inc., participated at all in the making of any fraudulent promises. The plaintiffs nevertheless sought to implicate the Mandell defendants in the alleged fraud. We rejected the plaintiffs' argument and held that the release, as to those three defendants, was valid and binding. We therefore granted their motion for summary judgment for all causes of action accruing prior to March 28, 1958, D.C., 181 F.Supp. 181. This decision was affirmed by the Circuit Court of Appeals for the Third Circuit. See 3 Cir., 287 F.2d 448; certiorari denied 366 U.S. 930, 81 S. Ct. 1651, 6 L. Ed. 2d 389. The defendants remaining in the case then filed their motions for summary judgment now before us. The reasons advanced in support of these motions may be summarized as follows:

 1. The law of the case is that any defendant who did not participate in the making of the alleged promises is entitled to the protection of the release; if, of course, the release names such a defendant. Therefore, all defendants covered by the release who were not present, physically or by their agents, at the February 5th meeting are entitled to summary judgment.

 2. As to the defendants who were present at the February 5th meeting, they too are entitled to summary judgment because the record as it stands establishes that there is no genuine issue of whether or not the plaintiffs relied on the alleged promises when they signed the release.

 3. All of the defendants are entitled to summary judgment because the law of Pennsylvania clearly requires one who claims to have been defrauded to return the consideration he received in the allegedly fraudulent transaction, and failure to return the consideration (or tender its return) amounts to a ratification of the transaction. The plaintiffs in the case at bar have not tendered back the $ 18,000, or any part of it, they received at the signing of the release.

 4. The statute of limitations bars recovery for all causes of action accruing prior to four years before September 11, 1959, the date of the filing of the complaint.

 We shall take up the contentions of the defendants in the order stated above.

 I. Defendants Who Were Not Present at the February 5th Meeting.

 'their predecessors, successors and assigns, and all their present and former parent, affiliated and subsidiary companies and each of their successors and assigns * * *'

 We are satisfied that the defendants which are not specifically named in the release are covered by the above-quoted language.

 The plaintiffs have attempted to avoid the granting of these defendants' motions for summary judgment by filing an affidavit averring that Samuel P. Mandell 'knew' of the fraudulent promises made by Food Fair and that 'Samuel P. Mandell and his affiliated companies were aware of the promises made to plaintiffs and participated in the failure to carry out the said promises.' (See second affidavit of John Taxin.) This knowledge on the part of Samuel P. Mandell, says plaintiffs, must be implied to his affiliated companies and thus somehow implicate these defendants in the alleged fraud. We reject this contention.

 We think the second Taxin affidavit (quoted in part above) is too vague and lacking in factual assertions to raise any genuine issue of whether or not Mandell knew of the fraudulent promises supposedly made by Food Fair. But in addition, this affidavit does not aver that Mandell knew that the said promises were made with no intention of carrying them out, and for the purpose of fraudulently inducing plaintiffs to refrain from prosecuting their legal remedies. Therefore, there is no averment that Mandell knew that a fraudulent promise had been made.

 Furthermore, it is difficult to understand the significance of the averment that Mandell 'participated in' the failure of Food Fair to buy produce, a promise which it made and only it could carry out. We think the record is devoid of any factual assertions which would justify us now in concluding that there exists a question of fact, determinable by a jury, as to whether Samuel P. ...


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