Early v. Santa Clara Broadcasting Co.
| Decision Date | 27 December 1962 |
| Citation | 27 Cal.Rptr. 212,211 Cal.App.2d 367 |
| Parties | Jack E. EARLY, doing business under the firm name and style of the Early Company, Plaintiff, Cross-Defendant, Cross-Complainant and Appellant, v. SANTA CLARA BROADCASTING COMPANY, INC., a California corporation, Defendant, Cross-Complainant, Cross-Defendant and Respondent. Civ. 20084. |
| Court | California Court of Appeals Court of Appeals |
Marvin J. Colangelo, San Francisco, for appellant.
Timothy A. O'Connor, Arthur W. Walenta, Jr., San Jose, for respondent.
Plaintiff appeals from a judgment denying him relief on his complaint and cross-complaint and granting defendant $1,881.78 on its cross-complaint.
QUESTIONS PRESENTED.
1. Was there a cancellation of the contract by plaintiff prior to the bringing of this action; (a) did plaintiff have the right to cancel; (b) did he actually cancel?
2. Damages.
3. Should a permanent injunction have been granted?
4. Findings.
RECORD.
Plaintiff operates an advertising business known as The Early Company. Defendant operated radio station KSJO in San Jose. On June 10, 1959, plaintiff's account executive, Bohannan, entered into a contract on behalf of plaintiff with defendant, under which defendant was to broadcast 1,190 radio spot announcements, Park Westwood commercials, during a 52 week period, backdated to commence on April 2, 1959, and to terminate March 31, 1960. There were to be 20 spot announcements per week, plus 150 bonus spots, at a total contract price of $3,120. There was no provision for cancellation in the contract, although Bohannan testified that Haist, the station representative with whom Bohannan dealt, had told him prior to the entry of the contract that the contract could be unilaterally cancelled. Both Haist and the station manager, Paul, denied this. In the last week of July, 1959, by mutual agreement, the number of announcements was to be cut from 20 to 5 a week for the month of August, after which the original schedule was to be resumed, and the omitted announcements made up.
Bohannan testified that on August 6, 1959, he contacted Haist and told him to cancel the broadcasts completely since the advertiser no longer desired the announcements to continue. The record is replete with conflicting testimony on this point. The court found that no such statement was made.
In September, the previous schedule was resumed. Early in October defendant sent plaintiff an invoice for the September announcements. Bohannan testified that he returned the invoice with a note to the effect, 'What in the world is this all about?' Also early in October plaintiff received a statement from defendant dated October 1, 1959, showing a balance due for August. Plaintiff wrote a letter to defendant stating that he would remit the balance on receipt of invoices.
On November 5, Bohannan received invoices for August, September and October. He then called Haist and claimed that the contract had been cancelled. Haist answered that KSJO was relying on the contract pursuant to Paul's instructions. Bohannan then said that he would write a letter about the matter. The letter was received December 1. It stated that plaintiff no longer wanted the commercials run, that the contract had been cancelled, and that defendant did not have and had not had 'since our cancellation last July' any authorization to run the commercials. Return of all transcribed commercials was demanded. Defendant continued to run the commercials, informing Bohannan by letter that nothing in Bohannan's letter nullified plaintiff's obligation to pay for the advertising ordered. A meeting to reach an 'amicable settlement' was suggested.
In December Haist and Bohannan met, and in January, 1960, Paul and Bohannan met. Bohannan insisted that the contract had been cancelled. No settlement was reached. Defendant continued to broadcast the commercials until January 25, when plaintiff filed this action asking for an injunction to restrain defendant from broadcasting the commercials and for damages. A temporary restraining order was issued. Defendant cross-complained for damages for alleged breach of contract. Plaintiff answered the cross-complaint, and, in turn, cross-complained for declaratory relief to determine the rights and duties of the parties under the contract, the amount of compensatory damages due plaintiff because of defendant's refusal to abide by the alleged cancellation of the contract, and because of the necessity of filing the suit, and for exemplary damages.
The court decreed that plaintiff recover nothing, and that defendant on its cross-complaint recover $1,881.78. The court also denied a permanent injunction.
The court found against plaintiff on the question of whether Haist told Bohannan that the contract could be cancelled unilaterally. Nevertheless, it is settled in California that a party to an executory contract has the power to stop performance of a contract on giving notice to that effect, being responsible in damages, however, for such cancellation. Upon receipt of notice the other party cannot continue performance and recover damages for full performance.
Richardson v. Davis (1931) 116 Cal.App. 388, 2 P.2d 860, is directly in point. There, the defendant agreed to pay the plaintiff $65 per month for two years for showing advertising films in certain railroad passenger terminals. After a few months' performance the defendant sent written notice to the plaintiff that the contract was terminated. The plaintiff, however, continued to run the films for the full two year period, and then sued for the contract price. In reversing a judgment of the trial court in the plaintiff's favor the appellate court held that the contract had been anticipatorily breached by the notice given the plaintiff by the defendant, and that in such case only damages for breach were recoverable, and not damages for services rendered after the repudiation. (See also Bomberger v. McKelvey (1950) 35 Cal.2d 607, 613-614, 220 P.2d 729.)
In order that the foregoing rule may apply it must appear that the repudiation be clear, positive and unequivocal. (See Gold Mining & Water Co. v. Swinerton (1943) 23 Cal.2d 19, 28-29, 142 P.2d 22; Hertz Driv-Ur-Self v. Schenley Distil. Corp. (1953) 119 Cal.App.2d 754, 760, 260 P.2d 93.) A mere declaration not to be bound will not amount to a breach. (See Atkinson v. District Bond Co. (1935) 5 Cal.App.2d 738, 743, 43 P.2d 867; California Canning Peach Growers v. Harris (1928) 91 Cal.App. 654, 267 P. 572.)
The court found on conflicting evidence that Bohannan did not cancel the contract. We are bound by that finding. It was not until the letter received December 1 that there was a clear attempt to cancel the contract. Although on the face of the letter it appeared to be a complete cancellation, nevertheless the action of the parties indicates that it was not so regarded by either, and its effect was nullified by the willingness of plaintiff to enter into negotiations and the fact that such negotiations actually took place (the Bohannan-Haist and Bohannan-Paul meetings). There is conflict in the testimony regarding what took place at these meetings so that the court's finding that the contract was not anticipatorily breached until the action for injunction was actually filed is supported.
Apparently the court allowed as damages the amount to which defendant would have been entitled had the contract been completed. Plaintiff does not attack this award as being excessive, nor can it be said that it bears no relation to the damages actually incurred. As to whether the required number of announcements were made there is substantial evidence to support the court's finding that defendant had performed its part of the contract. As to damages sought by plaintiff under his cross-complaint claiming that the use of the same recording for longer than two months resulted in a monotonous and poorly sounding announcement, the court, as hereinbefore pointed out, found that there was no cancellation of the contract until the filing of this suit, whereupon the broadcasting stopped. Hence there could be no damage.
The court's determination that plaintiff did not cancel the contract until the filing of this action precludes plaintiff from recovering any damages for any period prior thereto. Likewise, the court's finding that plaintiff breached the contract precludes him from recovery of damages for any period whatsoever. As plaintiff was not entitled to any compensatory damages, there could be no recovery...
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