Phillips Roofing Co., Inc. v. Maryland Broadcasting Co.

• Decision Date: 20 December 1944
• Docket Number: 62.
• Parties: PHILLIPS ROOFING CO., Inc., v. MARYLAND BROADCASTING CO.
• Court: Maryland Court of Appeals

40 A.2d 298

184 Md. 187

PHILLIPS ROOFING CO., Inc., v. MARYLAND BROADCASTING CO.

No. 62.

Court of Appeals of Maryland

December 20, 1944

Appeal from Circuit Court of Baltimore City; William L. Henderson Judge.

Bill by Phillips Roofing Company, Inc., against the Maryland Broadcasting Company, a body corporate of the State of Maryland, trading as Radio Station WITH, to enjoin defendant from interfering with the broadcast of plaintiff over such radio station during the term of a contract between the parties, and for other relief. From a decree dismissing the bill, plaintiff appeals.

Decree reversed and cause remanded.

Abram C. Joseph, of Baltimore (Louis J. Sagner and Herbert H Rosenbaum, both of Baltimore, on the brief), for appellant.

S Ralph Warnken, of Baltimore (Cook & Markell, of Baltimore, on the brief), for appellee.

Before MARBURY, C.J., and DELAPLAINE, COLLINS, GARSON, MELVIN, BAILEY, and CAPPER, JJ.

BAILEY Judge.

The appellant. The Phillips Roofing Co., Inc., filed its bill of complaint in the Circuit Court of Baltimore City praying for an injunction against the appellee, The Maryland Broadcasting Company, restraining it from interfering in any manner with the broadcasts of the appellant over Radio Station WITH, operated by the appellee, during the term of a contract between the parties, and for other relief. After answer and testimony, the Chancellor filed his decree dismissing the bill of complaint with costs. It is from this decree that this appeal is taken.

The contract, which was filed as an exhibit with the bill and offered in evidence, was dated October 12, 1943. It provided that, commencing with October 24, 1943, the appellant was entitled to the facilities of the station for broadcasting its program, 'Memory Lane,' from 9:15 to 10:00 o'clock A. M. every Sunday until the end of the Washington Redskins' 1943 football season, at a weekly charge of $1.00, and thereafter from 4:05 to 5:00 o'clock P. M. every Sunday until December 12, 1944, or one year from the ending of the Washington Redskins' 1943 football season, at a weekly charge of $41.80.

Other pertinent provisions of the contract, appearing among its printed conditions under '1. Payments,' are the following:

'(b) Advertiser agrees to pay for such broadcasting at the office of station on or before the twentieth day of the month following that in which broadcasting is done, prompt payment being of the essence of the contract.'

'(e) Station reserves the right to cancel this contract forthwith at any time in the event of default or violation by advertiser of any of the provisions of this contract or in the event that, in the opinion of station, advertiser's credit shall become impaired. Upon such cancellation charges in respect of all broadcasting done hereunder and unpaid shall become immediately due and payable. Such cancellation shall not prejudice any other right of station against advertiser.'

The facts, material to the issue in this case, are undisputed. All of the written communications between the parties, except the letter of May 24, 1944, were sent by mail. The bill for the broadcasts during the month of January was paid by check on March 8, 1944, and the February bill was paid in the same manner on March 27, 1944. Neither of these payments was made within the time specified in the contract. On April 15, 1944, the president of the broadcasting company wrote a letter to the appellant dealing primarily with other provisions of the contract relative to the delivery of the program material seven days in advance of each broadcast and to the engaging of a competent master of ceremonies. The letter then quoted paragraph 1(b) of the contract and stated: 'On a number of occasions you have failed to comply with this provision of the contract. We are formally notifying you that we insist upon strict compliance with the above quoted provision of the contract and if you fail to do so we shall exercise our right of cancellation which is provided for in numbered paragraph 1(e).' The appellant's attorney replied to this letter on April 17, 1944, discussing the controverted matters but making no comment on the point of prompt payment. However the March bill was paid on April 18, 1944, within the time specified in the contract.

The payment for the broadcasts during the month of April was due and payable on May 20, 1944. Theodore Phillips, president of the appellant, testified that on May 17, 1944, he drew his personal check on the Peoples Bank of Pikesville, Maryland, for $209.00 to the order of Station WITH in the presence of Gilbert Michel, to whom, at the same time, he delivered his personal check drawn on the same bank to the order of The Adpress for $1449.26, in payment of a bill for the printing of a pamphlet of poems known as 'Ted Phillips' Memory Lane.' He gave the check to Miss Murray, his secretary who had been working for him for more than eight years. The Adpress bill and check and the check stubs were offered in evidence. These stubs disclosed the Adpress check drawn on May 17, followed by a check to John Hancock Life Insurance Company on May 16, and then, on May 17, a check to WITH for advertising in the amount of $209. He testified further that there was nothing unusual in paying his company's bills from his personal account.

Michel's testimony was to the effect that, when he was in appellant's office collecting the Adpress bill, he saw Phillips draw another check and hand it to his secretary. He was not allowed to testify as to Phillips' comments about the check.

Miss Murray's testimony was as follows: 'I was at the office on Wednesday, May 17, 1944, and recall Mr. Gilbert Michel being in Mr. Phillips' private office. He was there close to an hour. Mr. Phillips and Mr. Michel were sitting in the office, and Mr. Phillips called me into his office and told me to look up two statements, one for the Adpress Printing Company and one for Station WITH. I got the statements for Mr. Phillips and he made out two checks. He handed one to Mr. Michel and gave me the other check, and told me to mail it to WITH, which I did. I mailed it after I got off, between five and five-fifteen at the corner of Baltimore and Greene Streets where I mail every night. It was addressed to Station WITH, East Lexington Street, Baltimore 2, Maryland, and was in an envelope, with a three cent stamp on it, and the return address of Phillips Roofing Company in the upper left hand corner. At the same time, I mailed other pieces, including a couple of copies of contracts and one to an insurance company. When Mr. Phillips gave me the check to be mailed I picked out from our records the statement from Maryland Broadcasting Company, WITH, for April. I stapled the statement together with the check as I do every other one. I definitely used in this particular case the same procedure previously adopted in mailing the check together with the statements.'

It is admitted that appropriate witnesses in the employ of the appellee would have testified, if called, that the check was never received by it. Thereafter on May 24, 1944, the president of the appellee wrote a letter to the appellant, quoting paragraphs 1(b) and 1(e) of the contract and stating: 'The contract charge for broadcasting during the month of April was payable at our office on or before May 20, 1944. Such charges have not been paid. This is a default or violation by you of the above quoted provision 1(b) of said contract. Pursuant to paragraph 1(e), above quoted, we hereby cancel said contract between us dated October 12, 1943.' This letter was delivered to the office of the appellant at 9 South Greene Street, in Baltimore, by messenger. The appellant, in its bill of complaint, alleged that it was ready, willing and able to pay any and all sums due the appellee under the contract, and, at the hearing, made a tender of the amount due for the April broadcasts.

In equity, time is not generally deemed as being of the essence of the contract. Miller's Equity Procedure, sec. 662; Smoot v. Rea, 19 Md. 398; Maughlin v. Perry, 35 Md. 352. But this general rule has certain well defined exceptions. One of the exceptions is that where the parties have expressly treated time as of the essence of the agreement, by incorporating such a clause in the contract, courts of equity will not lend their aid to enforce specifically the agreement, regardless of the limitation of time. Miller's Equity Procedure, sec. 663; Coleman v. Applegarth, 68 Md. 21, 11 A. 284, 6 Am.St.Rep. 417; Acme Building Association v. Mitchell, 129 Md. 406, 99 A. 545; Jaeger v. Shea, 130 Md. 1, 99 A. 954; Abrams v. Eckenrode, 136 Md. 244, 110 A. 468; Stern v. Shapiro, 138 Md.

615, 114 A. 587; Tarses v. Miller Fruit & Produce Co., 155 Md. 448, 142 A. 522; American Medicinal Spirits Co. v. Mayor & City Council of Baltimore, 165 Md. 128, 166 A. 407.

In the case of Scarlett v. Stein, 40 Md. 512, at page 525, this Court, speaking through Judge Robinson, said: 'Whether time is to be considered as of the essence of the contract must, of course, depend upon the intention of the parties. When this intention is expressed in clear and unambiguous terms, the contract must speak for itself, and the liability of the parties must be determined by the plain and obvious meaning of the language used.' This language was quoted with approval in Diamond v. Shriver, 114 Md. 643, 80 A. 217.

It is needless for us to cite other authorities to show that time was of the essence of the contract in the present case. The next question for our consideration is whether the condition for prompt payment had been waived by the appellee by its acceptance of payments after their due date. In Williston on Contracts, Revised Edition, Vol. 3, sec. 741, it is stated that ...