ALBUQUERQUE BROADCAST. CO. v. Regents of NM College, Civil Action No. 902.

• Decision Date: 07 December 1945
• Docket Number: Civil Action No. 902.
• Citation: 70 F. Supp. 198
• Parties: ALBUQUERQUE BROADCASTING CO. v. REGENTS OF NEW MEXICO COLLEGE OF AGRICULTURE AND MECHANIC ARTS.
• Court: U.S. District Court — District of New Mexico

70 F. Supp. 198

ALBUQUERQUE BROADCASTING CO. v. REGENTS OF NEW MEXICO COLLEGE OF AGRICULTURE AND MECHANIC ARTS.

Civil Action No. 902.

District Court, D. New Mexico.

December 7, 1945.

M. C. Mechem and A. T. Hannett, both of Albuquerque, N. M., Carl A. Hatch, of Clovis, N. M., and W. Theodore Pierson, of Washington, D. C., for plaintiff.

C. C. McCulloh, Atty. Gen., and Harry L. Bigbee, Asst. Atty. Gen., for defendant.

NEBLETT, District Judge.

Findings of Fact.

1. That plaintiff is the owner and licensee of KOB and defendant is the former owner thereof.

2. That in 1931 when defendant was owner and licensee of KOB it leased the station and its equipment to Journal Publishing Company, under which lease the control of the operation and supervision of most of the programs broadcast by KOB were vested in the unlicensed lessee. The Federal Radio Commission was not at that time notified of the transaction, nor was that Commission's consent to the assignment of the rights under the license obtained as was required by Section 12 of the Radio Act of 1927, 44 Stat. 1167. Subsequently the Communications Act of 1934, 47 U.S.C.A. § 151 et seq., was enacted and the powers of Federal Radio Commission were vested in the Federal Communications Commission. Section 12 of the Radio Act of 1927 was reenacted in all respects here material as Section 310(b) of Communications Act of 1934.

3. That in April, 1935, the lease having been called to the attention of the Federal Communications Commission, the Commission through its secretary directed a letter to counsel for defendant, in which among other things the defendant was advised as follows:

"The law contemplates that the power and control of the licensee over the programs broadcast and all equipment usually incident to the operation of a station must not be limited by contract. * * * The Report shows that there is a serious doubt as to the legality of the entire transaction. The Commission, therefore, will make an investigation of this matter."

About a month later the defendant filed an application for renewal of its license and the Commission designated the same for hearing on October 1, 1935, to determine, among other things, whether defendant, then the licensee, had violated the Communications Act.

4. That the defendant did not have the finances to operate the station, the lessee having sustained an operating loss of approximately $97,000 the previous four years under the lease.

5. That on May 7, 1936, the plaintiff and defendant entered into a contract which provided that defendant would sell the physical assets to plaintiff and assign the license of KOB issued to defendant for $25,000 cash, and the use of the station for one hour per day for educational purposes and programs on a non-cumulative basis. The provisions of this time and the provisions for plaintiff's control of this station were provided by the following last two paragraphs of the contract which are the subject matter of the controversy in the instant suit:

"And as a further consideration for the sale of the property, real and personal herein before described, the party of the second part agrees that it will furnish to the said party of the first part and to such other educational institutions as it may direct, but for educational purposes only and not for commercial or revenue producing purposes, one hour per day broadcasting time for each day the said station shall be operated, the time so allotted not to be cumulative if unused each day or part of day, but said unused time to be forfeited, and said time to be divided as follows: thirty minutes prior to six o'clock P. M. and thirty minutes subesquent to six o'clock, P. M., Mountain Standard Time, the said party of the first part or other institutions to furnish programs at such times in advance of their broadcasting as may be convenient in the operation of said station, said broadcasting time to be furnished to the party of the first part or such other educational institutions as it may direct, free from any cost or expense to it; so long as said Radio Station is operated and maintained by the second party, its successors and assigns, it being understood that the particular time for broadcasting herein provided for shall be selected at the option of the party of the first part, and the first party at its option may have the privilege of furnishing the announcer or broadcaster for such educational programs at its expense, and in the broadcasting by said station the name of the "New Mexico State College at Las Cruces" shall be included in the station announcements.

"It is further understood and agreed between the parties hereto that the party of the second part shall have complete control of said Broadcasting Station KOB, its equipment and operation, including unlimited supervision of programs to be broadcast, and that this sale is made subject to the consent of the Federal Communications Commission."

The last paragraph was required to be a part of the contract under the Commission Rule 103.18 before the Commission would even consider an application for its consent to the assignment of the license.

6. That the Commission's consent to the assignment of the license was sought and obtained, and the contract, copy of which had been attached to the application, was executed, except, of course, the provision for one hour of time per day and reference to defendant in certain station announcements which of necessity remained executory.

7. On June 30, 1945, defendant made the following written demand on plaintiff:

"New Mexico College of Agriculture and Mechanic Arts Office of the President "State College, New Mexico "June 30, 1945

"Albuquerque Broadcasting Company

"Albuquerque, New Mexico

"Attention Mr. T. M. Pepperday, President

"Sirs: The Board of Regents of the New Mexico College of Agriculture and Mechanic Arts hereby makes formal demand upon you for the following radio time: from 8:30 P.M. to 9 P.M. on Sunday, Tuesday, Wednesday, Friday and Saturday, and from 5:30 P.M. to 5:45 P.M. daily except Sunday, and from 10:00 A.M. to 10:30 A.M. on Sunday, in addition to the time now being used by the college; and requests that you signify your willingness to comply with this request within two weeks from the date hereof.

"Sincerely yours (Signed) Frank Light "Frank Light "Secretary-Treasurer "Board of Regents"

8. Plaintiff thereupon filed this complaint for declaratory judgment and asked the Court to declare among other things that plaintiff could not legally accede to the demands of June 30, 1945, and further that defendant was without right under the...