The opinion of the court was delivered by: DITTER
The question presented in this suit is whether, as plaintiff contends, the entire amount of a certain note is due, or whether, as defendants assert, there was an agreement to settle for a considerably lesser sum.
The case was tried to the court sitting without a jury, and this opinion will constitute my findings of fact and conclusions of law required by Rule 52(a).
Plaintiff's decedent, Harry J. Daly, an attorney, owned the controlling share of a company which operated a Maryland radio station. Sometime prior to 1969, Daly entered into an agreement to sell his interest to Towson Radio, Inc., a corporation then being formed by the defendants, Bright, Eisenhart, Hamilton, and Paisley. Part of the purchase price was obtained by a loan from Fidelity Bank to Towson, while an additional $200,000. was paid to Daly in the form of a note. This note, which was subordinated to the Fidelity's claim for its loan to Towson, was personally guaranteed by the four defendants. Towson defaulted on its various obligations and eventually was sold to Sudbrink, after which sale insufficient assets remained for Towson to pay the note to Daly. This suit was then instituted against the four guarantors.
At trial, Alexander N. Rubin, Jr., Esquire, testified that beginning in 1969, he represented the defendants, participating in some, although not all, of the negotiations which finally culminated in the sale to Sudbrink. Notwithstanding the objections of some of Rubin's clients, whose interests and investments would be wiped out by the sale, it was regarded as the best possible way out of a hopeless financial situation, and ultimately it was consummated.
In the course of representing the defendants, Rubin negotiated with Norman E. Burke, Esquire,
who represented the decedent, Harry J. Daly. In view of Fidelity's superior lien on Towson's assets, Daly favored the sale since it represented his only hope of realizing anything substantial from the interest which he once held.
On March 16, 1970, Rubin proposed to Burke a settlement of Daly's note on the following basis:
1. he would cause the four defendants, who were officers and directors of Towson, to approve the sale to Sudbrink;
2. the four defendants would induce their friends and relatives, who were stockholders in Towson, to approve the sale;
3. the four defendants would cause a guarantee to be executed to Daly on his note from Towson; and
4. the four defendants would pay a total of $15,000. in cash, which would be transmitted to Daly when the Sudbrink sale had been concluded.
Burke later advised Rubin that this offer was satisfactory and acceptable.
To substantiate this agreement, defendants introduced a letter dated March 18, 1970, from Burke to Rubin, which stated:
This will confirm our telephone conversation of Monday, March 16th, during which I told you that after the conditions set forth by the bank are met, my client will agree to accept the sum of $15,000. in cash in exchange for an absolute release of the four individual note signers. As I understand it, this money will not be forthcoming until the Sudbrink matter is closed to the purchaser's satisfaction. However, my client has again raised the point that since the four individuals have never paid him anything, he is not entirely convinced that they will pay him the $15,000. when due. I would hope that we can work out some kind of an arrangement to guarantee this payment once the other conditions of the Sudbrink arrangement have been met.
Rubin obtained $15,000. from the defendants, placed it in his attorney account, and apprised Burke of the fact that the money was in his possession. Daly died on August 19, 1970, but sale to Sudbrink was concluded in late October or November of that year. On December 22, 1970, Rubin tendered ...