Howard Cleaners of Baltimore, Inc. v. Perman

Marbury, J., delivered the opinion of the Court. This is an appeal from a summary judgment granted appellee, Sidney Perman, in the amount of $6,209.33, with interest and costs of suit, against the appellant, Howard Cleaners of Baltimore, Inc., a Maryland corporation. The question involved is whether summary judgment should have been granted to appellee who sued appellant for “stopping payment” on a check issued in part payment for the purchase of a laundry business, and upon condition that appellee would properly perform an employment contract with Arcade Laundry and Cleaning Co., Inc. (hereafter referred to as Arcade), which appellant claimed appellee had failed to do. On November 17, 1960, Arcade purchased from Louis Goodman and Sidney Perman their laundry business for the total purchase price of $18,000.

Sidney Perman thereupon entered into an employment agreement with Arcade (not a party to this litigation). Paragraph 9 of the agreement provided that “the said Sidney Perman does hereby covenant and agree with Arcade Laundry and Cleaning Co., Inc. that he will continue to operate the said existing business in a normal manner for a period of ninety (90) days from the date of settlement.” On the date of settlement (November 17, 1960), the appellant, Howard Cleaners of Baltimore, Inc., issued its check as a loan to and at the request of Arcade, payable to the order of Louis Goodman and Sidney Perman for the sum of $6,209.33. This check was issued not only at the request of Arcade, but on the express condition agreed to by Arcade and Sidney Perman that Perman would continue to operate the business in a normal manner for Arcade for a period of ninety days, and further that the “share of the selling price distributable to Sidney Perman shall not be paid to him but shall be placed in escrow with Reuben Caplan, Attorney, until the end of said ninety day period. Upon per ²⁹⁴ formance by Sidney Perman of this covenant, said sum of money shall be paid to Sidney Perman.” The check was endorsed by both payees and then placed in escrow.

In his declaration and affidavit in support of his motion for summary judgment appellee alleged that he was at all times ready, willing, and able to continue to operate the business and in fact did so operate it until February 11, 1961, when his work was stopped by Arcade, through its president, Joseph R. Himmelstein; that Himmelstein was also president of the appellant, and both Arcade and the appellant operated their businesses upon the same premises; that after the expiration of said ninety day period, on February IS, 1961, the appellee having fully performed said agreement, the check, endorsed by Goodman and Perman, held by Reuben Caplan, attorney, was delivered to appellee, who deposited it in his bank, but the check was returned unpaid by the Equitable Trust Company and marked “Payment Stopped”; and that although demand has been made for the payment thereof payment has been refused, so that he has not been paid his share of the purchase money represented by the check. The appellant, on the other hand, in his third plea to the declaration, and affidavit in support thereof, alleged that the appellee failed to conduct the business in a normal manner but did conduct it so as to reduce the weekly volume of business from $1,200.00 to $200.00 weekly, within a short period of time, in consequence of which Arcade suffered great