text:
    JEAN D. LANGSTON et al. v. ALLSTATE INSURANCE COMPANY
    [No. 42,
    September Term,. 1978.]

      Decided October 13, 1978.

      The cause was argued before Gilbert, C. J., and Morton and Thompson, JJ.

      Walter G. Moyle and B. Paul Noble, with whom were Noble, Moyle & Roberts on the brief, for appellants.

      Charles E. Wilson, Jr., with whom were McCarthy & Wharton on the brief, for appellee.
   Gilbert, C. J.,

delivered the opinion of the Court.

This litigation between Jean D. Langston, her son, Lawrence Langston, the appellants, and their insurer, Allstate Insurance Company, the appellee, is being fought on two fronts, i.e., Maryland and Florida. At this point in time, the Langstons have seen their victory, gained in an arbitration proceeding and confirmed in the Circuit Court of the 11th Judicial Circuit in and for Dade County, Florida, in the form of a summary judgment “against Allstate Insurance Company in the amount of $40,000.00,” qualified but not totally nullified by the District Court of Appeal of Florida, Third District, in Allstate v. Langston, Fla. App., 358 So. 2d 1387 (1978). In the meantime, the Circuit Court for Montgomery County, patently declining to follow the Florida arbitration proceeding or the Dade County circuit court, entered a judgment in favor of the Langstons against Allstate for $5,000.

The battle between the litigants is being waged over whether claimants, under a motor vehicle policy insuring two vehicles on separate premiums, may “stack” or pyramid coverage so as to obtain the maximum amount payable on each vehicle. Phrased in more explicit terms, the issue is, when two premiums are paid in one policy for two vehicles, may the claimant add or “stack” the maximum amount payable to any one person under the policies so that the $20,000 maximum amounts on each policy become a total of $40,000.

The arbitrators expressed no opinion on the question, nor should they have done so under Florida law, because that State has held in Government Employees Insurance Co. v. Mirth, 333 So. 2d 545, 547 (Fla. 3d. DCA 1976) that:

“Under a liability indemnity insurance policy providing uninsured motorist coverage, issues relating to the merits of the claim against the tort-feasor are triable on the arbitration, but an issue bearing on coverage is not to be so tried, and is triable by the court. Cruger v. Allstate Insurance Company, Fla. App. 1962, 162 So. 2d 690; Zeagler v. Commercial Union Ins. Co. of N.Y., Fla. App. 1964, 166 So. 2d 616.” (Emphasis supplied.)

See also Allstate v. Langston, supra.

The Circuit Court for Montgomery County implicitly held that the “stacking or pyramiding” of benefits was not allowed in Maryland. Moreover, the court sanctioned a credit to Allstate in the amount that the Langstons recovered from the insurance carrier on the vehicle in which Lawrence Langston was riding when he was injured.

Our task then is to rise above the debate between the parties and to endeavor to secure for each its respective rights, thereby securing those rights for the people of the State.

THE FACTS.

Lawrence S. Langston, a Maryland resident, but a student at the University of Miami, was severely injured on September 23, 1975, as the result of a collision between an uninsured vehicle and a motorcycle on which Langston was a passenger. Langston was paid $15,000, the full amount of the uninsured motorist coverage of the motorcycle owner’s motor vehicle liability. At the time of the accident, Langston was an insured under a motor vehicle liability policy containing uninsured motorist coverage. That policy had been issued in Maryland by Allstate to Mrs. Jean D. Langston. It insured her against liability and loss occasioned by an uninsured motorist. The policy covered two vehicles, a 1972 Ford and a 1966 Chevrolet. Lawrence Langston was included within the ambit of the policy by his status as son of the insured and resident of the same household as the insured. The policy limit as to an uninsured motorist for each vehicle was $20,000 each person, $40,000 each accident.

The damages to Lawrence “far exceeded” the $15,000 that was paid to him by Universal Underwriters Insurance Co., the motorcycle operator’s insurance carrier. Lawrence, therefore, made demand upon Allstate in the amount of $40,000, a figure he arrived at by “stacking” the $20,000 coverage afforded for damages caused by an uninsured motorist on each of his mother’s two vehicles. Allstate rejected the “stacking” concept. Instead, it deducted the $15,000 paid to Lawrence by Universal Underwriters from the $20,000 figure to which it contended it had obligated itself through the issuance of the policy to Mrs. Langston and offered the sum of $5,000 to Lawrence in settlement of his claim.

The Langstons, in accordance with the terms of their policy, demanded that the dispute “be settled by arbitration in accordance with the rules of the American Arbitration Association.” Seemingly racing to circumvent the arbitration proceeding, Allstate, on March 2, 1977, filed, in the Circuit Court for Montgomery County, a “Bill for Declaratory Relief.” That bill was followed two days later in Florida, by Allstate’s instituting a “Complaint for Injunction” and then on March 9, 1977, a “Motion for Temporary Stay” of the arbitration pending the determination of the Maryland suit brought in Montgomery County. The motion to stay was denied so that the arbitration hearing was held in Dade County on March 14,1977. The arbitrators made the following award:

“THE UNDERSIGNED ARBITRATOR(S), designated under the arbitration provision of Policy No. 0-18-550435, having been duly sworn and having heard the proofs and allegations of the parties, AWARDS as follows:
The Arbitrators [s/e] AWARD to the claimant is FORTY THOUSAND DOLLARS AND NO CENTS ($40,000.00).
This AWARD is subject to a judicial determination of the applicable policy limits. Claimant contends stacking applies. Respondent denies this. Respondent contends it is entitled to a $15,000.00 set-off. Claimant denies this. Claimant contends there is $40,000.00 in coverage. Respondent contends the coverage is $5,000.00. The Arbitrators make no decision in this regard. If the coverage is $5,000.00 the AWARD is $5,000.00. If the coverage is $40,000.00 the AWARD is $40,000.00.
This Award is in full settlement of all claims submitted to this arbitration.”

On the basis of the arbitration award, the Langstons moved for summary judgment. The Dade County court granted the motion and entered judgment for Lawrence by confirming and adopting “as the judgment of... [the] court” the “Award of Arbitration.” On July 28, 1977, the Dade court “entered two additional orders. One was entitled ‘Order Granting ... [Lawrence’s] Amended Motion for Summary Judgment.’ That order did not contain confirmation of the arbitration award, but recited that the motion for summary judgment was granted, and ordered ‘that accordingly summary judgment shall be entered against Allstate ... in the amount of $40,000.00.’ The other, entitled ‘Final Judgment,’ ordered that Lawrence recover from Allstate ... the said amount of $40,000.00, with provision therein for execution to issue.” Allstate v. Langston, supra. Allstate moved for a rehearing which was denied and then, as we have seen, appealed to the District Court of Appeal of Florida, Third District.

While the matter was pending in the Florida trial court, Allstate moved that summary judgment be granted to it by the Montgomery County trial court on the ground that there was “no genuine dispute between the parties as to any material fact, and that... [it] was entitled to judgment as a matter of law.” Md. Rule 610. The circuit court denied the Langston motion to stay the Maryland case until after disposition by Florida.

On December 12, 1977, the court heard argument on Allstate’s motion for summary judgment, opposition thereto, the Langstons’ “Counter-Motion for Summary Judgment” and the opposition to that motion. The court denied the counter-motion but granted Allstate’s motion and entered judgment in favor of the Langstons for $5,000, the amount Allstate maintained that it owed under Mrs. Langston’s motor vehicle liability policy after allowing a deduction of a sum equal to the amount recovered from Universal.

This appeal followed, but before the matter was argued in this Court, the Florida intermediate Court of Appeals, as we have previously said, reversed the Dade, County circuit court.

The Florida appellate court held that

“[t]he action initially filed in Maryland for coverage determination conferred on that court the jurisdiction to litigate and settle the question. Wade v. Clower, 94 Fla. 817, 114 So. 548 (1927). For that reason, the question as to the coverage limit could not have been decided in the subsequently filed action in Dade County ... even if the latter action had been brought for that purpose____
Where the policy was issued in Maryland to a resident of that State, the construction and legal effect of the terms of the policy and the rights and obligations of the parties thereto are to be determined by the laws of that State. (Citations omitted).”

THE LAW.

Before we explore whether the so-called “stacking or pyramiding” is permitted by the Maryland statute, we think it well to discuss the question of the credit allowed Allstate as a result of the payment to the Langstons by Universal Underwriters of $15,000.

If there were any doubt over whether a credit could be taken, it was resolved in a strikingly similar case, by the Court of Appeals in McKoy v. Aetna Casualty & Surety Co., Inc., 281 Md. 26, 374 A. 2d 1170 (1977).

McKoy was struck by a negligent driver while she was operating her vehicle in Washington, D.C. The negligent driver was insured by Government Employees Insurance Company (GEICO), but the liability of GEICO, under the policy was limited to $10,000. McKoy alleged her damages to be substantially in excess of $20,000. Inasmuch as the GEICO policy limit was less than $20,000, the tort-feasor was, for Maryland purposes, deemed to be an uninsured driver, as that term was used in the Aetna policy insuring McKoy against injury by uninsured motorists.

GEICO paid McKoy $10,000 in satisfaction of its obligation under its policy. McKoy then claimed indemnification from Aetna, under the uninsured motorist coverage, in the amount of $20,000. Aetna asserted that it was entitled to a set off of the amount paid by GEICO so that it was liable only to the extent of $10,000. The circuit court agreed with Aetna, but the Court of Appeals did not.

The Aetna policy provided in pertinent part:

“ T. UNINSURED MOTORISTS COVERAGE (Damages for Bodily Injury and Property Damage Caused by Uninsured Highway Vehicles)
‘The Company will pay all sums which the insured or his legal representative shall be legally entitled to recover as damages from the owner or operator of an uninsured highway vehicle because of bodily injury or property damage, caused by accident and arising out of the ownership, maintenance or use of such uninsured highway vehicle; provided, for the purposes of this coverage, determination as to whether the insured or such representative is legally entitled to recover such damages, and if so the amount thereof, shall be made by agreement between the insured or such representative and the company or, if they fail to agree, by arbitration.
‘HI. LIMITS OF LIABILITY
‘Regardless of the number of insureds under this insurance, the company’s liability is limited as follows:
(a) The limit of bodily injury liability stated in the schedule as applicable to “each person” is the limit of the company’s liability for all damages because of bodily injury sustained by one person as the result of any one accident and, subject to the above provision respecting “each person,” the limit of liability stated in the schedule as applicable to “each accident” is the total limit of the company’s liability for all damages because of bodily injury sustained by two or more persons as the result of any one accident.
(d) Any amount payable to an insured under the terms of this insurance shall be reduced by (1) all sums paid to such insured for bodily injury or property damage by or on behalf of the person or organization legally liable therefor and (2) the amount paid and the present value of all amounts payable to such an insured under any workmen’s compensation law, exclusive of non-occupational disability benefits.’ ” (Emphasis supplied.)

The Court held that the words “any amount payable” as employed in Clause III (d) “should be construed as providing for a setoff against the total damages suffered and not against the face value of the endorsement.” 281 Md. at 30. The Court went on to say:

“Section I, ‘Uninsured Motorist Coverage,’ sets out the basic liability of Aetna, to pay all damages which the insured is legally entitled to recover resulting from an accident with an uninsured motorist. Section III, entitled ‘Limits on Liability,’ begins ‘the company’s liability is limited as follows.’ This strongly suggests that the limitations which follow are to be understood as limits on the primary liability articulated in Section I.
Section 111(a) then limits liability to $20,000 per person. Sections 111(b) and (c) concern limits on property damage and claims made under other insurance. Finally, Section 111(d) contains the setoff clause. There is no indication that 111(d) is in any way subordinated to 111(a). Both clauses stand on equal footing, and both must therefore be understood as independently modifying the primary liability of Section I. That is, amounts paid to an insured on behalf of the tortfeasor shall be deducted from ‘all sums which the insured ... [is] legally entitled to recover as damages from the owner or operator of an uninsured highway vehicle.’ Under the terms of this contract the setoff clause, 111(d), applies to the total damages incurred and is not a further limitation upon the $20,000 limit set forth in clause 111(a).” 281 Md. at 30-31.

The Allstate policy which we are called upon to construe provided:

“SECTION II
“PROTECTION AGAINST BODILY INJURY AND PROPERTY DAMAGE BY UNINSURED AUTOMOBILES
COVERAGE SS — Uninsured Motorists Insurance
Allstate will pay all sums which the insured or his legal representative shall be legally entitled to recover as damages from the owner or operator of an uninsured automobile because of bodily injury, sickness or disease, including death resulting therefrom, hereinafter called ‘bodily injury’, sustained by the insured or property damage, caused by accident and arising out of the ownership, maintenance or use of such uninsured automobile; provided, for the purposes of this coverage, determination as to whether the insured or such representative is legally entitled to recover such damages, and if so the amount thereof, shall be made by agreement between the insured or such representative and Allstate or, if they fail to agree may be made by arbitration.[]
No judgment against any person or organization alleged to'be legally responsible for the bodily injury or property damage shall be conclusive, as between the insured and Allstate, of the issues of liability of such person or organization or of the amount of damages to which the insured is legally entitled unless such judgment is entered pursuant to an action prosecuted by the insured with the written consent of Allstate.
3. ‘uninsured automobile’ means:
(a) a motor vehicle with respect to the ownership, maintenance or use of which there is, in at least the amounts specified by the financial responsibility law of the state in which the insured automobile is principally garaged, no bodily injury and property damage liability bond or insurance policy applicable at the time of the accident with respect to any person or organization legally responsible for the use of such automobile, or with respect to which there is a bodily injury and property damage liability bond or insurance policy applicable at the time of the accident but the company writing the same either has denied coverage thereunder or is or becomes insolvent; or
(b) a hit-and-run automobile as defined;
but the term ‘uninsured automobile' shall not include:
(i) an insured automobile;
(ii) a motor vehicle which is owned or operated by a self-insurer within the meaning of any motor vehicle financial responsibility law, motor carrier law or any similar law;
(iii) a motor vehicle which is owned by the United States of America, Canada, a state, a political sub-division of any such government or an agency of any of the foregoing;
(iv) a land motor vehicle or trailer if operated on rails or crawler-treads or while located for use as a residence or premises and not as a vehicle; or
(v) a farm type tractor or equipment designed for use principally off public roads, except while actually upon public roads.
6. Limits of Liability.
(a) The limit of bodily injury liability stated in the declarations as applicable to ‘each person’ is the limit of Allstate’s liability for all damages, including damages for care or loss of services, because of bodily injury sustained by one person as the result of any one accident and, subject to the above provision respecting each person, the limit of liability stated in the declarations as applicable to ‘each accident’ is the total limit of Allstate’s liability for all damages, including damages for care or loss of services, because of bodily injury sustained by two or more persons as the result of any one accident.
(c) Any amount payable under the terms of this coverage because of bodily injury or property damage sustained in an accident by a person who is an insured under this coverage shall be reduced by
(1) all sums paid on account of such bodily injury or property damage by or on behalf of (i) the owner or operator of the uninsured automobile and (ii) any other person or organization jointly or severally liable together with such owner or operator for such bodily injury or property damage including all sums paid under the Bodily Injury Liability Coverage or Property Damage Liability Coverage of the policy____
(d) Any payment made under this coverage to or for any insured shall be applied in reduction of the amount of damages which he may be entitled to recover from any person insured under the Bodily Injury Liability Coverage or Property Damage Liability Coverage of the policy.
(e) Allstate shall not be obligated to pay under this coverage that part of the damages which the insured may be entitled to recover from the owner or operator of an uninsured motor vehicle which represents loss paid or payable to the insured under any automobile physical damage insurance of the policy.
Other Insurance. With respect to bodily injury to an insured while occupying an automobile not owned by the named insured, the insurance under this coverage shall apply only as excess insurance over any other similar insurance available to such insured and applicable to such automobile as primary insurance, and this insurance shall then apply only in the amount by .which the limit of liability for this .coverage exceeds the applicable limit of liability of such other insurance.
Except as provided in the foregoing paragraph, if the insured has other similar insurance available to him and applicable to the accident, the damages shall be deemed not to exceed the higher of the applicable limits of liability of this insurance and such other insurance, and Allstate shall not be liable for a greater proportion of any loss to which this coverage applies than the limit of liability hereunder bears to the sum of the applicable limits of liability of this insurance and such other insurance.” (Emphasis supplied.)

Allstate asserts that the instant case is distinguishable from McKoy because of certain “technical differences” which “must [be] considered.” They argue, “Subordination of clauses is not the issue as it was in McKoy, as [policy provision] 6(c)(i) applies to a reduction of amounts payable from the ‘coverage’ which is modified or delineated in [policy provision] 6(a). It is the coverage that is reduced, not all sums.”

A recent Court of Appeals case, State Farm Mut. Auto. Ins. Co. v. Md. Auto. Ins. Fund, 277 Md. 602, 856 A. 2d 560 (1976), construed the meaning of “coverage” as it is used in Md. Ann. Code art. 48A, § 541 (c). As Chief Judge Murphy noted therein: “ ‘[c]overage’ is a common insurance term; it has been defined as the ‘aggregate of risks covered by the terms of a contract of insurance.’ Webster’s Third New International Dictionary 525 (1961).” The present edition, Webster's Third New International Dictionary Unabridged (1976 ed.), carries that same definition of “coverage.” Among its meanings, “coverage” is listed as “1. the act or fact of including or treating: a thing that covers: COYER: as a: INSURANCE: protection by insurance policy: inclusion within the scope of a protective or beneficial plan ... c: the aggregate of risks covered by the terms of a contract of insurance.” See also The American Heritage Dictionary of the English Language (1970 ed.) which defines “coverage” to mean “2. The extent of protection afforded by an insurance policy.” In other words, “coverage” is insurance. When so read, we fail to see the distinction between McKoy and the case sub judice.

“Coverage SS” of the Allstate policy provides that “Allstate will pay all sums which the insured ... shall be legally entitled to recover as damages from the owner or operator of an uninsured automobile....” That language does not limit the payment by Allstate to the difference between the amount actually obtained from the uninsured driver and the Allstate policy limits. If Allstate had desired to so delimit its liability it should have so provided. As wé read “Coverage SS” Allstate is liable, to the extent, of course, of its policy limits, to the insured for all damages he is entitled to recover from the uninsured 'motorist, less the amount actually recovered. Thus, if, in the instant case, the insured were entitled to recover damages of $100,000,? the insured may recover from Allstate that sum reduced by the $15,000 paid by Universal and further reduced to the limit of Allstate’s liability under the Uninsured Motorist Endorsement. Aetna v. McKoy, supra.

Even as Judge Eldridge said in McKoy, if “the interpretation of the policy urged upon us by ... [Allstate] is ... [a] reasonable one, this would, at best, create an ambiguity. In such" situations, ambiguities are resolved against the author of the Instrument.” 281 Md. at 31. See also Penn., Etc., Ins. Co. v. Shirer, 224 Md. 530, 537, 168 A. 2d 525 (1961):

“However, if the insurance company, in attempting to. limit coverage ..., failed to make its intended meaning clear and drew an ambiguous clause, that ambiguity would be resolved against it as the one who drafted the instrument, as is true in the construction of contracts generally, Ebert v. Millers Fire Insurance Co., 220 Md. 602,611, and cases cited; Employers’ Liability Assurance Corporation, Ltd. v. Reed’s Refrigeration Service, Inc., 222 Md. 49, 54.”

We now turn our attention to the principal question put to us by the parties. Does the Maryland Statute, Article 48A, proscribe “stacking or pyramiding”? We shall not answer that question because as we see it neither “stacking nor pyramiding” is involved.

In order to avoid confusion in the minds of the reader, we shall define what we mean by “stacking or pyramiding.” Both of those terms, as used in insurance litigation, may be defined to mean the recovering by a claimant “several times over for his injuries.” A.J. Widiss, A Guide to Uninsured Motorists Coverage (1969). So that if a person is insured by carrier A, carrier B, carrier C, and carrier D, and he recovers the full amount of his claim from carrier A, subsequent recovery from B, C, and D for the same loss is “stacking” or “pyramiding.” He has, in short, turned his loss into a three hundred percent profit. That type of activity is barred by Md. Ann. Code art. 48A, § 543 (a), insofar as coverage under an uninsured motorist endorsement is concerned. Section 543 (a) provides:

“Notwithstanding any other provision of this subtitle, no person shall recover benefits under the coverages required in §§ 539 and 541 of this article from more than one motor vehicle liability policy or insurer on either a duplicative or supplemental basis.” []

Allstate contends that section 543 (a) prohibits Langston’s recovery from Allstate because that section forbids “duplication of benefits” or recovery on “a supplemental basis.”

Allstate fails to note that this section only applies when there is “more than one motor vehicle liability policy or insurer____” (Emphasis supplied.) Since there is only one motor vehicle liability policy covering the Langston vehicles and since Allstate is the only insurer from whom recovery is sought under section 541 of Article 48A, section 543 (a) of that article is not apposite to the present case. An additional flaw in Allstate’s argument is that the Langstons seek to do neither of the two proscribed acts.

Duplication of benefits is “stacking.” It is payment in full twice or more for the same claim. For example, if, as we have previously said, claimant recovers the full amount oí the sum he is “legally entitled to recover as damages from the owner or operator of an uninsured automobile,” he may not successfully assert a claim against his own insurance carrier inasmuch as that claim would be duplicitous. There is nothing in the case at Bar that suggests an effort to duplicate benefits. The injury and damages to Lawrence Langston far exceed the $15,000 he obtained from Universal, and the $40,000 he maintains Allstate owes him under its policy, even when the two sums are added together. The truth of that statement is not controverted.

The other activity barred by section 543 (a) is that of supplementing benefits recovered under the Uninsured Motorist Endorsement. We interpret “supplemental” to mean securing remuneration over and above the recovery from an uninsured motorist of all that the claimant is legally entitled to recover. The bar on supplemental payment prevents recovery of more than all one is legally entitled to recover. By way of illustration, we point out that if the claimant is legally entitled to recover the sum of $100,000 from the uninsured motorist, and claimant so recovers, he may not successfully prosecute a claim against his own insurance carrier for an additional sum or “supplement.” Such a recovery would amount to “stacking or pyramiding.”

Section 543 (a) does not, however, proscribe the claim the Langstons are asserting against Allstate. We think it significant to note that the Allstate premium on the Langston vehicles was billed as follows:

“COVERAGE DESCRIPTION 72-Ford 66-Chev. * * * * *
SS Uninsured Motorists $4.00 $4.00

Patently, a separate premium of $4.00 on each of the two vehicles was charged and collected by Allstate. Notwithstanding that it has collected two premiums it seeks to make but one remittance. From the record, we are unable to determine to which of the two vehicles Allstate assigned its loss, or if it differentiated between them.

The question of whether an insured may recover on an uninsured motorist claim for each of the vehicles on which he has paid a premium may be new in this State, but it most certainly is not a new concept. Similar claims have been made in other jurisdictions with differing results.

The basic premise upon which the purpose of legislation requiring insurers to provide protection to its insured in the form of uninsured motorist coverage is the idea of placing the insured motorist in the same position that he would have been if the operator or owner of the uninsured vehicle had been properly insured.

Some courts have held that the “other insurance” clause of motor vehicle liability policies was generally valid and not repugnant to the statute requiring uninsured motorist coverage. They have taken the view that “the statute was not designed to provide the insured with greater insurance protection than would have been available had the insured been injured by a person having a policy containing the minimum required statutory limits.” 28 A.L.R.3d 558; M.F.A. Mut. Ins. Co. v. Wallace (1968 Ark.), 431 S.W.2d 742; Tindall v. Farmers Auto. Management Corp., 83 Ill. App. 2d 165, 226 N.E.2d 397 (1967), 28 A.L.R.3d 546. The decisions adopting the “other insurance” clause reasoning are in conflict with McKoy wherein the Court of Appeals implicitly rejected that approach and refused to follow the view that the “other insurance” clause limited the insured’s right of recovery to the amount he could obtain from the uninsured motorist.

We think there is much to be said for the point of view expressed in Sturdy v. Allied Mut. Ins. Co., 203 Kan. 783, 457 P. 2d 34 (1969), a case bearing similarity to that now before us. Sturdy had two automobiles insured on the same policy. He paid a separate premium on each car. While riding on a motorcycle, he sustained bodily injury as the result of a collision with an uninsured motorist.

Sturdy and the insurer submitted the issue of damages to arbitration. The parties agreed that if the arbitrator found in favor of the insured, the insurer would pay any sum up to the minimum coverage of $10,000. If the award exceeded $10,000, it was agreed that the court should determine whether the insurer was liable for that sum. The policy, as does that in the case sub judice, provided that “[w]hen two or more automobiles are insured hereunder, the terms of this policy shall apply separately to each____” The Kansas court concluded that:

“Defendant here chose to issue coverage on two separate automobiles and to accept a premium for each. Under these facts clauses designed to prevent the payment of a disproportionate amount of a loss which is properly shared with another insurance company should not be distorted to reduce whatever amount is otherwise due the insured under his policy.
... [T]he policy provides the named insured with two kinds of coverage: While he is in his insured automobile, and wherever else he may happen to be when he suffers bodily injury due to an uninsured motorist. This latter constitutes [s/c] a broad reservoir of coverage. The only exception in it arises from the specific exclusionary clause which provides the policy does not apply to bodily injury to an insured while occupying an automobile (other than an insured automobile) owned by the named insured (or a relative) or through being struck by such an automobile. Obviously this exclusion is designed to prevent two or more automobiles being covered for the price of one, inasmuch as ownership of an automobile is the foundation of the entire policy, and to induce persons owning more than one automobile to secure coverage for all. In effect, then, as to the named insured, upon his payment of a single premium for one automobile, the policy provides vast coverage — with the single important exception. If, in paying one premium for a single automobile, coverage is purchased while occupying the insured automobile along with the coverage not tied to that automobile, the question might well be asked, What coverage is intended by payment of an equal premium for a second automobile? Does it also include the broad reservoir of coverage secured under the first premium for the first automobile, and if not, why?” 203 Kan. at 789-92, 457 P. 2d at 39-41.

The court then answered its own rhetorical question, stating:

“[7] It must be borne in mind the purpose of uninsured motorist insurance is tQ provide compensation for personal injury to the innocent victim of the uninsured motorist. As to the named insured the coverage is a contract benefit for which he has paid. Here the damage to the insured has been determined and he now seeks indemnity for it. He is not seeking any windfall as a result of his injury but he is seeking full indemnity based on payment of two separate premiums. Applying traditional rules of construction we think he is entitled to that coverage. Of the two constructions which could be placed on the limitation of coverage in this particular policy under these facts, this conclusion effectuates insurance as to each automobile mentioned in the policy and permits recovery rather than forfeiture of a benefit for which the insured has paid. Defendant seeks to avoid fully indemnifying its insured on what we believe to be an overly strict construction of its policy in its favor. If it were intended to restrict the limit of liability to $10,000 in one policy where more than one automobile is covered, this could have been very easily accomplished in plain, unmistakable language____ We are accustomed to purchasing insurance which follows the person in units or multiples, with the premium fixed by the insurer accordingly (the premium, of course, is subject to state regulation). When we pay a double premium we expect double coverage. This is certainly not unreasonable but, to the contrary, is in accord with general principles of indemnity that amounts of premiums are based on amounts of liability. Defendant argues that what plaintiff is seeking amounts to pyramiding coverage but nothing is said about pyramiding the premiums which effectuate the coverages. We would not be understood as implying that an injured insured can pyramid separate coverages in the same policy so as to recover more than his actual loss (see Rosson v. Allied Mutual Ins. Co., Kan., 457 P.2d 42).” (Emphasis supplied.) 203 Kan. at 792-93, 457 P. 2d at 41-42.

The Supreme Court of Florida reached the same result in Mullis v. State Farm Mut. Auto. Ins. Co., 252 So. 2d 229 (Fla. 1971), holding that “insurance policies covering two or more automobiles owned by the insured with uninsured motorist coverage included and containing a limitation of liability ... provided coverage to the extent of the bodily injury inflicted upon an insured in the total amount of the per person coverage for each vehicle.” Cited with approval in Tucker v. Government Employees Ins. Co., 288 So. 2d 238, 241 (Fla. 1973). See also Sellers v. Government Employees Ins. Co., 214 So. 2d 879 (1968), cert. dismissed, 229 So. 2d 873 (Fla. 1969).

“It is an anomaly to contend that if two automobiles are combined in the coverage of one auto liability insurance policy with uninsured motorist protection added that an exclusion of the kind here involved may be validly inserted, but that if a separate policy covered each automobile such exclusion is invalid. The mere form of a policy — a combination coverage — should not be the predicate for an exclusion of additional coverage.” Tucker v. Government Employees Ins. Co., supra at 242.

Under the rationale of McKoy, an insured is not restricted to the amount of the uninsured motorist insurance of the vehicle in which he was riding at the time of the accident giving rise to his loss, see also Sellers v. Government Employees Ins. Co., supra, nor may his own company setoff the amount recovered from the insurance carrier of the vehicle in which he was riding. Of course, the insured may only recover for his full loss. He is not entitled to make a profit by collecting more than the total loss. Such being the law, we can perceive of no reason why a different rule should be applied when the insurance coverage afforded on different vehicles is combined into one policy instead of two or more, particularly where, as here, a separate premium is charged for each vehicle covered by the policy. Sellers v. Government Employees Ins. Co., supra.

In Lipscombe v. Security Ins. Co. of Hartford, 213 Va. 81, 83, 189 S.E.2d 320, 322 (1972), the court repeated what it had held in Cunningham v. Insurance Co. of North America, 213 Va. 72, 189 S.E.2d 832 (1972), wherein it has adopted the reasoning of the Kansas court in Sturdy that an “insured is entitled to double coverage for the double premium paid.”

The Court of Appeals of Louisiana, Third Circuit, in Roberie v. State Farm Mut. Ins. Co., La. App., 291 So. 2d 923 (1974), considered a case wherein Roberie was insured by State Farm on both of his motor vehicles. A separate policy had been issued on each. Roberie, while driving one of his vehicles, was struck and seriously injured by a “hit and run” driver who has never been apprehended. As a result of the impact, Roberie’s damages were “equal to or in excess of $10,000.” Each of the two policies issued to Roberie by State Farm provided “uninsured motorist coverage of $5,000.00 for each person and $10,000.00 for each accident.” Roberie claimed $5,000 under each policy. State Farm offered to pay only $5,000. The Court, noting that a premium had been charged and paid for uninsured motorist insurance in each policy, allowed recovery on both policies. Moreover, the Court disallowed a deduction made under the medical payment coverage.

There are, to be sure, a number of jurisdictions which have taken a contrary view, We are of the belief, however, that the rationale of McKoy, together with what the Florida Supreme Court, in Tucker, termed the “weight of authority” leads to the conclusion that in Maryland the payment of a premium for uninsured motorist insurance on each of two or more separate motor vehicles permits recovery on each, but only to the extent of one full recovery for any loss sustained by the insured. If the Legislature wants to limit recovery to a specified sum or to not more than the amount payable under a policy insuring one motor vehicle, it has but to so provide.

As we see it, the uninsured motorist insurance mandated by the General Assembly to be included in each automobile insurance policy issued in this State is remedial legislation designed for the protection of the motoring public. Being remedial in nature, the statute must be construed liberally so as to effectuate its benevolent purpose in affording insurance coverage to the injured party.

We hold that when an insurance carrier issues an automobile liability insurance policy containing, as it must, uninsured motorist coverage on two or more motor vehicles, and it charges and collects a separate premium on each vehicle of that coverage, it is liable to its insured for the total coverage for which he has paid, or the full amount of his damages, whichever is less.

Other issues raised by the Langstons involve res judicata and the refusal of the Circuit Court for Montgomery County to stay this proceeding pending disposition by the Florida appellate court. That decision having been handed down before oral argument and holding that Maryland is the proper forum for the interpretation of the policy, the issues are now moot.

Judgment reversed.

Case remanded to the Circuit Court for Montgomery County with instruction to enter judgment in favor of the appellants against the appellee in such amount as the Circuit Court may determine, consistent with this opinion.

Costs to be paid by appellee.

      . Md. Ann. Code art. 48A, § 541 (c) mandates that “every policy of motor vehicle liability insurance issued, sold, or delivered in this State after July 1, 1975 shall contain coverage, in at least the amounts required under Title 17 of the Transportation Article, for damages which the insured is entitled to recover from the owner or operator of an uninsured motor vehicle____” Transportation Article Title 17, § 17-103 (b) requires coverage “of up to $20,000 for any one person and up to $40,000 for any two or more persons, in addition to interest and costs....”

      . See n. 1, supra.

      . Section II, subsection “Conditions,” sub-subsection 11, of the policy issued by Allstate to Mrs. Langston provided:

        “Arbitration. If any person making claim hereunder and Allstate do not agree that such person is legally entitled to recover damages from the owner or operator of an uninsured automobile because of bodily injury to the insured or property damage, or do not agree as to the amount of payment which may be owing under this coverage, then upon written demand of either, the matter or matters mion which such person and Allstate do not agree shall be settled by arbitration in accordance with the rules of the American Arbitration Association, and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. Such person and Allstate each agree to consider itself bound and to be bound by any award made by the arbitrators pursuant to this coverage.”

      . A counterclaim was filed by the Langstons, and it was on the basis of the counterclaim, together with the Award of Arbitration, that judgment was entered against Allstate.

      . At the time of the accident, $10,000 was the minimum amount of automobile liability insurance required in the District of Columbia.

      . But see, Md. Ann. Code art. 48A, § 541 (c) provides that:
      “Any provision in any policy of motor vehicle liability insurance issued after July 1,1975, with respect to the coverage provided for damages sustained by the insured as a result of the operation of an uninsured motor vehicle, which commands or requires the submission of any dispute between the insured and the insurer to binding arbitration, is prohibited and shall be of no legal force or effect.”
      Thus, inasmuch as the policy is governed by Maryland Law, the arbitration proceeding was not binding.

      . The $100,000 figure is hypothetical and' should not be construed or interpreted as this Court’s subtle effort, to place a monetary value on Lawrence Langston’s loss.

      . Judge Wilner, writing for this Court in Oarr v. Government Employees Ins. Co., 39 Md. App. 122, 129, 383 A. 2d 1112 (1978), “expressly” declined to consider the issue put to us in this appeal. Judge Wilner did, however, refer in n. 9 to a number of cases, including those cited in the present opinion, that permitted “stacking.”

      . The Court is cognizant that many medical pay or loss of income policies allow stacking or pyramiding. The same is true of life insurance policies.

      . Enacted as Laws 1972, ch. 73, § 1 and codified as § 543 (a), Md. Ann. Code art. 48A.

      . See n. 7, supra.

      . See 28 A.L.R.M 551, Annotation, “Uninsured Motorist Insurance: Validity and Construction of ‘Other Insurance’ Provisions.”

      . Id. at 556.

      . Md. Ann. Code art. 48A, § 541 (c) proscribes language in a policy requiring arbitration of uninsured motorist disputes between insurer and insured. See n. 6.

      . 203 Kan. at 787, 457 P. 2d at 38. The quoted wording is identical to that contained in the Allstate policy issued to the Langstons.

      . See n. 12, supra.


source: Caselaw Access Project

author: Wilner, J.,

license: Public Domain

text:
    PAUL R. HOFFMAN et ux. v. KEY FEDERAL SAVINGS AND LOAN ASSOCIATION
    [No. 60,
    September Term, 1978.]

      Decided October 13, 1978.

    .The cause was argued before Davidson, Wilner and Couch, JJ.

      Leo HowardLubow, with whom were MichaelL. Schwartz and Freishtat & Schwartz on the brief, for appellants.

      Franklin Goldstein, with whom were Melnicove, Kaufman & Weiner, P.A. on the brief, for appellee.
   Wilner, J.,

delivered the opinion of the Court.

Appellants, Paul and Judith Hoffman, for themselves and a class they seek to represent, appeal from an order of the Circuit Court for Baltimore County sustaining appellee’s demurrer to Count I of their Amended Declaration, without leave to amend, and from the court’s refusal to allow the action to proceed under Maryland Rule 209 as a class action. The principal question is whether the court erred in concluding, from the facts alleged in Count I (and the exhibits incorporated in it), that a certain loan transaction between the parties was not usurious.

The loan transaction in question was in the nature of construction financing convertible into a “permanent” mortgage, in order to allow the Hoffmans to build a home on a lot they purchased in Howard County. Appellants used $53,000 of their own money, and desired to borrow $14,000 from appellee, Key Federal. Pursuant to a previous commitment letter, Key Federal agreed to make the loan, settlement of which occurred on January 29, 1976.

At that time, and in accordance with the terms of the commitment letter, Key Federal delivered to the Hoffmans its check for $14,000, the full proceeds of the loan. The Hoffmans immediately endorsed that check (and delivered as well one of their own for $53,000) to Robert L. Kolscher and George G. Wachter, trustees. The delivery of these funds was accompanied by the execution of a trust agreement governing, among other things, the future disbursement of the funds. The $14,000 loan was evidenced by a promissory note, secured by a deed of trust upon the Hoffmans’ lot and improvements. The note required repayment in equal monthly installments of $105.75, principal and interest, commencing May 1,1976, and continuing for the ensuing 25 years. Interest commenced running on the $14,000 from the date of closing, and, apparently, was separately billed for. the period from January 29, 1976, through April 30, 1976 — -the construction period. An annual interest rate “on the unpaid balance” was stated in the note to be 7%%.

The critical agreement, in terms of the legal issue presented, is the trust agreement between the Hoffmans and the two trustees, both of whom are alleged to be “officers, agents and employees of Key Federal and were acting on behalf and under the control and direction of Key Federal.” The agreement recited the loan from Key Federal, and stated that a “condition precedent” to the loan was that the Hoffmans erect and complete certain improvements within nine months from that date. It stated further that “for the purpose of guaranteeing the completion of said improvements”, the Hoffmans had turned over to the trustees the proceeds of the mortgage loan, and that such proceeds were “to be deposited by said Co-Trustees, in their own names, with Key Federal Savings and Loan Association as a pending fund to secure the erection of the aforesaid improvements”. These funds were to be advanced to the Hoffmans in six installments as certain specified levels of completion were achieved.

The agreement prohibited the commencement of any work until written authorization was received from Key Federal. However, once such authorization was received, work must commence within 30 days; otherwise, the agreement “may be . voided by the Co-Trustees and all monies paid to Key Federal ,.. on account of their mortgage loan____” In that event the Hoffmans released the trustees from “any suits, legal actions, etc.”, and “by the signing of this agreement ... hereby expressly give their permission to the said Co-Trustees to follow the above stated course of action.” In similar vein, the agreement provided that, if work on the improvements stopped for a period of 20 consecutive days, or was not completed within nine months, the trustees, “in their discretion, have the authority to use the balance of the aforesaid loan then in their hands towards the cost of completing said improvements or to pay [Key Federal] on account of its aforesaid mortgage loan.”

Finally, the agreement provided that “by the acceptance of this trust by the [trustees] and the agreement by them to perform the duties imposed upon them... they do not assume any personal responsibility, and [the Hoffmans] do ... not hold them responsible and do... expressly release them from such responsibility and no claim shall be made upon them for or on account of any matter or thing in excess of the sum of money paid into their hands or such balance thereof as may be remaining and undisposed of in accordance with the terms and agreements as hereinbefore set forth.”

Pursuant to this agreement, the trustees deposited the entire sum (presumably the $67,000) in a noninterest bearing account at Key Federal, withdrawing and disbursing the same as construction proceeded. Although the Amended Declaration did not specifically allege this, the court, in lieu of granting leave to amend, considered the pleading as implicitly alleging that, whilé on deposit with Key Federal, these funds were not segregated in any way, but were instead intermingled with Key Federal’s general funds, and were thus usable and used for the general purposes of the association.

The basis of the Hoffmans’ complaint is that, between January 29, 1976 (the date of closing) and the time the last advancement was made pursuant to the trust agreement, the Hoffmans paid $800 in interest to Key Federal, this being interest on the full amount of the $14,000 loan for that period, notwithstanding that the loan proceeds were advanced in installments. Their claim is that they were required to pay interest on amounts that had not been advanced to them, and that did not, therefore, constitute an “unpaid balance” upon which interest could properly be charged. This $800, they assert, amounted to usury in that it constituted interest on amounts not actually lent to and within the exclusive control of the Hoffmans; and they sought, as damages $2,400. In addition, as representatives of a class, on behalf of each other person in the class who obtained a residential construction loan from Key Federal under similar arrangements, they claimed the greater of $500 or treble the amount of “usurious” interest charged.

Appellants’ theory of recovery emanates primarily from the principles announced by the Court of Appeals in Tri-County Fed. S. & L. v. Lyle, 280 Md. 69 (1977); and, in large part, the initial question is whether the transaction alleged here is but a variation upon a theme or something substantially different from that considered by the Court in that case.

Lyle also involved a residential construction loan, obtained in order to finance both the purchase of a lot and construction of a house on it. At closing, a check for $60,000 was issued to the Lyles, which they immediately endorsed back to the savings and loan association. The association then paid out $15,000 to the seller of the lot, that being the purchase price of the property, but retained the balance of $45,000, which became part of its general funds. No separate escrow account was maintained. The $45,000 was to be paid out by the association in nine installments as work progressed. Evidencing the transaction was a note for $60,000, bearing interest at the rate of 8% per annum, secured by a deed of trust.

Five months later, before any part of the $45,000 had been disbursed, the Lyles abandoned their plans and repaid the association $15,000 plus $573.29 accrued interest on the $60,000. During the interim, an additional $1,600 in interest had been paid. Thereafter, Mr. and Mrs. Lyle sued to recover three times the amount of interest paid on the $45,000. With respect to this undisbursed sum, the Court stated, at page 73:

“At no time was this under the Lyles’ control, or under their partial control, as it might have been had it been held in escrow by others for their account, even though subject to restrictions. It was deposited in Tri-County’s general account, and remained there from the day the Lyles signed the note until repayment was made.”

For that reason, said the Court, that sum was not part of any “unpaid balance” owed by the Lyles, and any interest charged on it was usurious. At page 76:

“Here the ‘unpaid balance’ referred to by Art. 49, § 3 [the predecessor statute to Commercial Law article, § 12-103] was the $15,000.00 owed by the Lyles to Tri-County; the $45,000.00 was a balance beyond their control, to which they had no access until they commenced the construction of their house. So long as it remained in the sole control of Tri-County, and was not utilized by the Lyles, the imposition of the interest charged was usurious, because the $45,000.00 was not and could not be a part of the unpaid balance of the loan to the Lyles.”

Seizing upon the Court’s comment about the absence of an escrow account in Lyle, Key Federal attempts to distinguish that case, and thereby escape from the meaning the Hoffmans ascribe to it, by pointing to the trust agreement existing here. It relies on Toney Schloss v. Union Federal, 233 Md. 224 (1964), and the cases cited in it for the proposition that the full $14,000 became “presently loaned” to the Hoffmans, and therefore constituted the “unpaid balance”, at time of settlement, when the proceeds of the loan were actually, though only momentarily, disbursed to them.

Toney Schloss involved a construction loan arrangement very similar to that used here. The mortgage loan proceeds were disbursed to the borrower at settlement, and, as part of the overall agreement with the lender, these proceeds were immediately deposited with trustees selected by the lender, to be further disbursed in stages as construction progressed. The ease did not involve the question of usury, or whether interest could properly be charged prior to disbursement by the trustees. Bather, the sole question was whether such an arrangement constituted a mortgage to secure “future advances”, and, as to any disbursement made by the trustees that they were not required to make under the loan agreement, whether the construction mortgage became subordinate to another mortgage given to a third party of which the construction lender had actual notice. It was in this context that the Court concluded (233 Md. at 233) that “the money loaned by the [construction mortgagee] to the mortgagor was money presently loaned and it did not constitute future advances”. Consequently, said the Court, the construction mortgage “was a lien for the full amount of the consideration named therein from the time of its recordation____”

The argument of Key Federal has a certain facial appeal: if, under Toney Schloss (and a number of cases that preceded it), the full amount of the loan proceeds are considered to be “presently loaned” when disbursed at time , of settlement, notwithstanding their immediate deposit under a trust agreement, surely they must also constitute the “unpaid balance” owed as of then. This argument overlooks, however, the very different considerations involved in the two types of situations.

The device of disbursing the entire loan proceeds at timé-' of settlement, and then requiring the borrower to deposit them in trust pending further disbursement based upon the progress of construction, was developed and used primarily to avoid the effect of an 1872 statute making the priority of future advances date from the time of the advancement, rather than from the date of the mortgage, as against the rights of intervening creditors. See Comment to Former Article 21 (noted in footnote 4). The obvious policy embodied, in that statute was to protect subsequent creditors by assuring that thosé claiming prior liens had, in fact, given value for those liens. Thus, a lien could not be claimed with respect to money that had not been advanced. As against this policy, however, a construction lender had to be assured that the funds lent, or obligated to be lent, would, in fact, be used for the intended purpose, and that the security of his lien would not be jeopardized by collateral transactions occurring after he committed himself and during the progress of construction. To conclude, in that context, that the entire sum was “presently loaned” at time of settlement, when the lender actually committed the funds, to the borrower under an arrangement that assured their ultimate actual disbursement to the project, was a reasonable and pragmatic resolution to what otherwise would have been a serious statutory impediment to efficient construction financing. As between the construction mortgagee, the mortgagor, and intervening creditors, no one was injured by such a result, and the statutory goals could be achieved. Constructive notice of the full amount of the lien was given to the world when the mortgage was recorded; thus, prospective intervening creditors would know what lien was ahead of them, and the construction lender was assured of his first lien on the entire amount of his construction loan.

The considerations at issue with respect to the usury laws are quite different. These laws deal not with the co-relative rights of creditors, but with the relationship between lender and borrower. They deal with interest, which the law defines as compensation imposed by a lender “for the extension of credit for the use or forbearance of money____” (emphasis supplied), Commercial Law article, § 12-101 (e); and their purpose is to limit the amount of such compensation that may lawfully be exacted by lenders. The point addressed by Lyle is that, in order to charge interest in the first place, there must exist the “use or forbearance” of money. Thus, interest may not be charged for the “use” of money of which the borrower has had no use, or for the “forbearance” of money which the lender has not forbore. Because, in this context, we are dealing with a charge imposed by a lender solely by reason of his ceding control over money to the borrower, the question of whether such a cession has in fact occurred becomes paramount. It is not, therefore, the obligation or agreement to relinquish the funds that is relevant, but the actual relinquishment.

This does not, of course, require an unconditional relinquishment; Lyle makes clear that some restrictions as to use or possession may be imposed. But when the totality of the restrictions, or the totality of the circumstances under which they are imposed, is so pervasive as to negate the reality of an actual relinquishment of use and control, so long as that condition pertains, there has not been the forbearance or transferrence of use required in order to assess interest. Thus, whereas for purposes of determining the priority of “future advances” the commitment of funds may have sufficed to make the amount committed “presently loaned”, in dealing with the usury laws, it is the relinquishment, not the commitment, that governs.

It is in this light that we must test the circumstances of this case against the principles stated in Lyle. Given the overall nature of the transaction at issue here, and, in particular, the character of the trust agreement itself, we believe that the principles announced in Lyle are equally applicable to the situation here. Quoting from earlier cases, the Court made clear in Lyle that “the laws against usury ought to be strictly enforced”, that “courts have not hesitated, in every case, to tear off, with unsparing hands, the mask under which it has been attempted to conceal the usury, and to declare the true nature of the transaction”, that “no device or subterfuge of the lender will be permitted to shield him in taking more than the legal interest on a loan”, and finally that “[i]n whatever part of the transaction usury may lurk, or in whatever form it may take, or under whatever guise the lender may attempt to evade the law, the court will seek to ascertain what the contract actually was between the parties and give the debtor relief.” See 280 Md. at 74, 75.

Based upon the allegations in the Amended Declaration, the Hoffmans had no more control over or use of the $14,000 here, prior to disbursement by the trustees, than the Lyles had over the $45,000 while it remained in the hands of Tri-County. Conversely, Key Federal gave up no significantly greater measure of control over or forbearance of the $14,000 prior to such disbursement, than did Tri-County. The Court's mention of an escrow account in Lyle was in the context of whether the funds were "under the Lyles’ control, or under their partial control.” That was the critical element. The use of a trust arrangement that contains the form but not the substance of the requisite control will not suffice; and here there was only the appearance — the form — of control in the Hoffmans. Coupling the facts (alleged in the Amended Declaration) that (1) the trustees were officers of Key Federal, not selected by the Hoffmans, (2) they had no discretion in terms of investing the corpus of the trust, but were required to maintain it in a noninterest bearing account at Key Federal, (8) once so deposited, the funds were not segregated, but were intermingled with the other general funds of the association, and remained available for general use by the Association, including re-lending or re-investing, and (4) the immunity of the trustees from any liability to the Hoffmans except to the extent of any balance remaining in their hands, it is clear that, prior to disbursement by the trustees, the Hoffmans had no real control whatever over the $14,000. That fact is not erased by using a document entitled a trust agreement.

This does not mean, however, that all or perhaps any of the interest charged on the $14,000 for the “pre-disbursement” construction period is usurious. Lyle does not require, or authorize, that conclusion. In Lyle, the amount retained by the association, and thus excluded by the Court from consideration as part of the “unpaid balance”, was 75% of the total principal amount upon which interest was paid. This had the effect of making the interest paid on the whole amount far in excess of that lawfully allowed to be collected on the true "unpaid balance” of $15,000. This is evident from footnotes 2 and 3, appearing on pages 71 and 72 of the Opinion. At the time, the maximum interest rate allowed was 8%. The court computed the allowable interest, at that rate, on $45,000 as $1,637, thus making the allowable interest on the actual unpaid balance of $15,000 one-third of that amount or $545. Yet, the Lyles had paid a total of $2,173 — far more than that permitted by law on the $15,000 unpaid balance. That was the extent of the usury.

It is apparent here (unlike the situation in Lyle) that the entire $14,000 was actually disbursed by Key Federal and the trustees at various times during the construction period. Although Key Federal is not entitled to collect interest on the $14,000 by virtue of its “disbursement” on January 29,1976, it is entitled to begin collecting interest from the time the proceeds of the loan were disbursed by the trustees, and thus truly relinquished by the association.

Where the full proceeds of the loan have, in fact, been disbursed to the borrower, and have thus become the unpaid balance of the loan (even though they become such in stages), we have a somewhat different situation than pertained in Lyle, and we must look more specifically to the various statutes comprising the State usury law to determine whether the loan is usurious.

Commercial Law article, § 12-103 (b), as it was in effect at the time this mortgage was made, provided, in relevant part, that:

“A lender may charge interest at an effective rate of simple interest not in excess of 10 percent per annum on the unpaid principal balance of the loan if:
(i) There is a written agreement signed by the borrower which sets forth the stated rate of interest charged by the lender;
(ii) The loan is secured by a first mortgage or first deed of trust on any interest in residential real property;
(iii) There is no prepayment penalty in connection with the loan;
(iv) The loan is made and the mortgage or deed of trust is executed after May 31,1974, and before June 2, 1976;
(v) The loan is not a renewal of a loan which was made by the lender to the borrower before June 1, 1974 and which was secured by a mortgage or deed of trust on the same property; and
(vi) The lender did not issue before June 1, 1974, a written commitment agreeing to make the loan at a rate of interest of 8 percent or less.” (Emphasis supplied.)

From the Amended Declaration and the exhibits to it, it would appear that the six conditions enumerated in § 12-103 (b) were satisfied; and thus, Key Federal was entitled under that section to charge interest at an effective rate of simple interest not in excess of 10% per annum. The term “effective rate of simple interest” is defined in § 12-101 (d) as “the yield to maturity rate of interest received or to be received by a lender on the face amount of a loan, computed in accordance with § 12-107 of this subtitle.”

Section 12-107 addresses the situation in which a “charge or fee considered interést under this subtitle is charged at or before the inception of a loan contract.” Derived from former art. 49, § 2 (b), which itself was basically a codification of a procedure set forth by the Court of Appeals in B. F. Saul Co. v. West End Park, 250 Md. 707 (1968), this section provides that, where such advance fees are involved, the effective rate of interest is to be determined by deducting the amount of those fees from the principal balance of the loan and applying the interest, excluding such fees, to the net balance of the loan. Section 12-107 does not, however, apply to the situation here, for the interest improperly charged during the time the funds remained in the trustees’ account was not a charge or fee imposed “at or before the inception of [the] loan contract.” It was not in the nature of “points”, or loan origination fees, or similar one-time charges with which both B. F. Saul Co. and § 12-107 were directly concerned. What was collected here was not a “charge or fee considered interest” but interest itself, imposed after the inception of the loan contract.

In light of this difference, it would seem that the appropriate way of determining whether this loan is usurious is to consider the combined effect of §§ 12-103 (b) and 12-101 (d), and to determine whether the total amount of interest charged during the true life of the loan, including the interest charged for the period prior to disbursement by the trustees, produces a yield to maturity in excess of 10% per annum. The note in question, attached as Exhibit 2 to the Declaration, calls for monthly payments to commence on May 1, 1976, which is the beginning of the 25-year repayment period. Reference to the published principal and interest repayment tables reveals that, even if no part of the construction period prior to May 1, 1976, were considered as part of the life of the loan (i.e., it is assumed that none of the $14,000 was disbursed until May 1,1976), the addition of the $800 paid for the money during the construction period to the total interest payable over the 25-year remaining life of the loan would not produce an effective rate of interest in excess of 10% per annum, See Bettum v. Mont. Fed. S & L Ass’n, 262 Md. 360 (1971); Montgomery Federal Savings and Loan Association v. Baer, 308 A. 2d 768 (D.C. C.A., 1973).

Accordingly, the pleading, when coupled with the exhibits to it, shows on its face that the loan was not, and could not have been, usurious. For that reason, the court was correct in sustaining Key Federal’s demurrer, to Count I of the Amended Declaration without leave to amend. Given this conclusion, it is unnecessary to consider the question of whether the action should proceed as a class action under Maryland Rule 209.

Judgment affirmed; appellants to pay the costs.

      . The Amended Declaration contains two Counts. The court also sustained appellee’s demurrer to Count II, also without leave to amend; but appellants have appealed only from the court’s action with respect to Count I.

      . The agreement did not specify whether “all monies” meant only the $14,000 proceeds of the mortgage loan or included as well all or any part of the $53,000 advanced by the Hoffmans.

      . Md. Annot. Code, Commercial Law article, § 12-114 provides that any Eerson who violates the usury laws of that subtitle shall forfeit to the orrower the greater of three times the amount of interest wrongfully collected, or $500, whichever is greater. Hence, the claim for $2,400.

      . At the time Toney Schloss was decided, by virtue of then art. 66, § 3, in Baltimore County, “if the future advance under a mortgage were voluntary, it would not have priority over an intervening purchaser, mortgage or lien creditor if the mortgagee received actual notice of the rights of such third party prior to such advance; but if the advance were obligatory under the mortgage, the advance would have priority over the rights of such intervening third parties notwithstanding such actual notice.” See “Comment to Former Article 21, § 7-102” appearing in Real Property article, following § 7-102. This distinction has now been repealed by Real Property article, § 7-102 (b); but, at the time, it was important to determine (1) whether the payments in question were “future advances”, and (2) if so, whethér they were voluntary or obligatory.

      . It is also to be noted that the 1872 statute did not apply to deeds of trust — only to mortgages. The device in question therefore did little more than to apply, in a practical way, the benefits available to a deed of trust to a mortgage as well.

      . Of additional significance is the fact that the rate charged on the loan was the maximum then allowed by law — 8%. This meant that any interest charged in excess of that properly applicable to the $15,000 was necessarily in excess of the maximum permitted by law for the loan, and therefore usurious.

      . Repayment of the loan over a 25-year period in equal monthly installments of $105.75 would result in a total interest payment of $17,725 ($105.75 x 300 less $14,000 principal repayment). If the $800 were added to that, the total interest payment would be $18,525, which, based on the amortization schedule published in Monthly Mortgage Payments Handbook (2nd Ed.), p. 150, would produce an effective annual interest rate of less than 8.1% — well below the maximum permitted 10%>. Moreover, if the calculation is made strictly in accordance with § 12-107, based upon the appropriate schedule published in Prepayment Mortgage Yield Table for Monthly Payment Mortgages (5th Ed!), p. 375, the effective annual interest rate would be only 8.48%>.

      . We express no opinion as to whether the increase in the effective rate of simple interest occasioned by the collection of interest prior to disbursement by the trustees would result in any violation of the truth-in-lending requirements of State or Federal law as that issue was not raised by the Hoffmans in this proceeding.


author: Liss, J.,

text:
    HAROLD WILLIAM CONNOR v. CELANESE FIBERS COMPANY et al.
    [No. 41,
    September Term, 1978.]

      Decided October 16, 1978.

      The cause was argued before Moylan, Mason and Liss, JJ.

      Ronald C. Brubaker for appellant.

      R. Roger Drechsler, with whom were Gary G. Leasure and Lord, Whip, Coughlan & Green, P.A. on the brief, for appellees.
   Liss, J.,

delivered the opinion of the Court.

Harold William Connor, appellant, was an employee of the Celanese Fiber Company on May 30, 1974. He filed a claim with the Workmen’s Compensation Commission in which he alleged that on that date he sustained accidental injuries arising out of, and in the course of, his employment. A hearing was requested and the following issues were submitted to the Commission: (1) nature and extent of disability; (2) apportionment, and (3) whether the complaints and/or disability of low back were causally related to the accidental injury. After a hearing, the Commission, on the 7th day of January, 1976, issued an order in which it found that the claimant sustained an accidental injury arising out of, and in the course of, his employment on May 30, 1974. It is to be noted that the conclusion of the Commission on this issue is not disputed by the appellees. The Commission found that the claimant sustained a permanent partial disability resulting in 18% loss of the use of the left leg (knee). It further found that the appellant’s complaints as to the disability of his lower back were not causally related to the accidental injury.

Claimant filed a motion for rehearing on the grounds of: (1) newly discovered evidence, and/or (2) error of law. After a review of all the evidence before it, the Commission, on the 16th day of July, 1976, reaffirmed its original order. The claimant thereupon filed an appeal to the Circuit Court for Allegany County which was docketed as Case No. 13011 Law. The employer and its insurer were named as appellees. While this appeal was pending, appellant filed a petition to implead the Subsequent Injury Fund and to remand the case to the Workmen’s Compensation Commission for further proceedings. We believe, that in order to place the issues in this case in their proper perspective, it would be useful at this point to'explicate the historical background of the Subsequent Injury Fund.

The history of the concept of providing compensation for an injured employee for a portion of his disability which pre-existed the subsequent injury had its beginnings in Acts of 1945, ch. 637, which became effective on June 1,1945. This provision created a “Second Injury Fund” whereby an employee who had previously lost the use of a hand, arm, foot, leg or eye and subsequently lost the use of another of these parts of body in a compensable accident that was permanently and totally disabling would be entitled to receive compensation beyond the amount awarded against the employer for the most current injury. This additional compensation was to be paid from the “Second Injury Fund” upon written order of the Workmen’s Compensation Commission. The Treasurer of the State of Maryland was designated as custodian of the Fund which was accumulated from charges made against employers or their indemnitors on a flat rate basis per accidental injury. These sums were paid to the Commission and remitted to the State Treasurer who was charged with limited administrative duties in the disbursement of the funds.

The Acts of Maryland of 1963, ch. 809, codified as Maryland Code Article 101, Section 66 (1964 Repl. Vol.), broadened the original compensatory scheme by creating the Subsequent Injury Fund • which succeeded the Second Injury Fund. Payments which had been ordered by the Workmen’s Compensation Commission were no longer restricted to cases of permanent and total disability caused by the loss of a second enumerated member or organ. With the new Act, payments of additional compensation were mandated from the Subsequent Injury Fund to an employee who sustained any injury in a compensable accident where that employee had suffered permanent impairment due to a prior accident or disease or congenital condition. However, payment was conditioned upon the employee’s permanent total disability or permanent partial disability exceeding 50% of the body.

The status of the Fund was the principal issue before the Court of Appeals in Subsequent Injury Fund v. Pack, 250 Md. 306, 242 A. 2d 506 (1968). In that case, Judge Finan, speaking for the Court, made an exhaustive analysis of the status of the Fund and concluded, as explained by Judge Powers of this Court in Subsequent Injury Fund v. Howes, 11 Md. App. 325, 333, 274 A. 2d 131 (1971), that

the Fund was incapable of being a party to any proceeding anywhere, before the Commission or in any court; it could make no claim nor could a claim be asserted or prosecuted against it; it could not appear, nor could counsel appear for it as a party; it could not appeal, nor could any party appeal against it; it was not an entity, but a nonentity; it was, and still is, a bank account and portfolio of investments, in the custody of the State Treasurer, from which payments are made when the Commission orders payment.

The Legislature responded to the Pack decision by passing the Acts of 1969, ch. 394 which amended Code Article 101,t Section 56 (a) by providing that: “For the' purposes of this Section, the word ‘person’ (as used in the first sentence of the section) shall be deemed to include the Subsequent Injury Fund as created by Section 66 of this article.” The effect of this amendment was to permit the Fund to appeal from any order of the Workmen’s Compensation Commission which affected its interest and by which it was aggrieved.

By enactment of ch. 551, Acts of 1974, the Legislature further amended Code Article 101, Section 56 (a) by adding the following language to the end of the second sentence in that section: “and no award shall be made against such fund by the Commission or by any court unless the fund is a party to the proceeding and is represented by counsel.”

In the same session, the Legislature amended Code Article 101, Section 66 (5) by adding the following language to the last sentence of the section:

The Fund may be impleaded at any stage of the proceedings, either before the Commission, or on appeal; but if impleaded on appeal from the decision of the Commission, or on further appeal to the Court of Special Appeals, the Court shall suspend further proceedings and remand the case to the Commission for further proceedings in order to afford the Fund an opportunity to defend the claim.

When, as we have previously noted, the appellant in this case moved to implead the Subsequent Injury Fund and to remand the case to the Workmen’s Compensation Commission, the trial judge acted correctly in issuing an order suspending any further action in the Circuit Court and remanding the case to the Commission for further proceedings. Issues were framed by the parties and the case was again heard before the Commission. One of the seven issues raised by the Fund was “what permanent impairment, if any, due to previous accident or disease, or congenital condition did the employee have prior to his alleged injury? ” The Commission concluded that the claimant did not have a pre-existing condition which was disabling on May 30, 1974 (the date of the injury arising out of his employment with Celanese Fibers), and for that reason the Fund was not a proper party in the case. The Commission order dated July 25, 1977 embodied that conclusion, and also reaffirmed the original orders of January 7, 1976 and July 16, 1976.

Claimant thereupon entered an appeal to the Circuit Court for Allegany County from the order of July 25,1977 and filed a petition citing the grounds for the appeal and raising nine issues to be determined. Those issues covered the entire spectrum of the controversy between Celanese Fibers and the claimant, and the controversy between the claimant and the Subsequent Injury Fund. Celanese and the Fund filed answers to the appeal petition which admitted certain allegations of the claimant and denied others. This appeal was, we believe, erroneously docketed as an entirely new proceeding and assigned a new number, Case No. 13427 Law.

Both cases were called for trial on January 10, 1978, and at that time it was discovered that there were two issues to be determined before the trial court could proceed with a trial on the merits. In the original case, No. 13011 Law, the appellee contended that although the appellant had indicated his desire to have the case tried before a jury, he had failed to make the required election in the form prescribed by Maryland Rule 343 (a). Appellee, in its answer to the claimant’s original appeal petition in No. 13011, denied that the claimant was entitled to a jury trial. Appellee conceded that in the second petition for appeal a jury trial had been prayed in accordance with the provisions of Rule 343 (a).

The second issue required to be determined was whether the appellant was entitled to have all issues in the case determined in one trial. In chambers, discussions were held between the court and counsel, and at the end of those discussions the trial judge concluded that the two appeals should be tried separately with the first appeal being heard first and the need for a second trial depending at least initially on the decision rendered in the first trial. He also concluded that the. first appeal was to be tried non-jury because of the failure of the claimant to comply with Rule 343 (b), but that the second appeal, if required to be heard, would be a jury trial because the claimant had complied with the provisions of the jury election rule in that appeal. It is from these judicial determinations that this appeal was filed.

Appellant raises two issues on appeal:

(1) Was the trial court correct in ordering the case to be tried in-two parts?
(2) Was the trial court correct in denying the claimant’s right to a jury trial?

Appellee has propounded three additional issues, but we believe the answers to the two issues raised by the appellant will be dispositive of this case.

The confusion in this controversy arose out of the filing by the appellant of a second appeal after the case had been remanded by the Circuit Court and reheard by the Workmen’s Compensation Commission. The Clerk of the Circuit Court was equally in error in docketing the case as a new proceeding and assigning it a new civil number. We point out that Code Article 101, Section 66 (5) explicitly provides that when the Subsequent Injury Fund is impleaded while the case is on appeal from a decision of the Commission either in the Circuit Court or the Court of Special Appeals, that “the Court shall suspend further proceedings before it and remand the case to the Commission for further proceedings.” (Emphasis supplied.)

Black’s Law Dictionary 1457 (4th ed. 1951) defines remand as the sending of the cause back to the same court out of which it came, for the purpose of having some action on it there.

When the original appeal was remanded by the Circuit Court this step meant that the trial judge was returning the matter to the administrative body for further action in accordance with the applicable law. The remand did not dismiss or terminate the original administrative proceedings nor did the Circuit Court dismiss the appeal pending before it. The further proceedings were not new proceedings, but one stage in a single process. NLRB v. Donnelly Garment Co., 330 U. S. 219, 91 L. Ed. 854, 67 S. Ct 756 (1947); Ford Motor Co. v. NLRB, 305 U. S. 364, 83 L. Ed. 221, 59 S. Ct. 301 (1939); 2 Am.Jur.2d, Administrative Law, Sec. 766 (1963); 73 C.J.S., Public Administrative Bodies and Procedure, Sec. 241 (1951).

After the third hearing before the Commission and the issuance of its order, any aggrieved party was entitled to file its notice of appeal from the order in the original appeal case, as the original appeal case was still open and pending in the Circuit Court. All of the issues between the various parties would then have been before the court for determination.

Appellant complains that the trial court erred in ordering that the two cases pending in the Circuit Court be tried separately,, Our holding in this case will require that the two cases be consolidated, since we conclude that there is only one appeal pending. The trial court, however, under Rule 501 (a) has wide discretion in furtherance of convenience, or to avoid prejudice, in that it may order a separate trial for any claim, cross claim, counterclaim or third party claim, or for any separate issue. In the absence of an abuse of that discretion, there is no review of the act of the trial judge. See Greenstein v. Meister, 279 Md. 275, 368 A. 2d 451 (1977); Martin v. City of Annapolis, 240 Md. 579, 214 A. 2d 800 (1965); Hughes v. Averza, 223 Md. 12, 161 A. 2d 671 (1960).

The sole remaining issue is whether the appellant is entitled to a jury trial as against either the employer-insurer or, in the event of a bifurcated trial, in the claim against the Subsequent Injury Fund. We conclude that the appellant is not entitled to a jury trial as to any of the parties.

In the recent case of Impala Platinum Limited v. Impala Sales (U.S.A.), Inc., 283 Md. 296, 389 A. 2d 887 (1978), Judge Orth of the Court of Appeals discussed the history of Rule 343, which governs the election of a jury trial. That case was concerned with the problem of timely election of a jury trial. Here we are concerned with Rule 843 (a), which provides that:

An action at law shall be tried before the court without a jury unless an election be made, in person or by attorney, for a jury as hereinafter provided. Such election shall be in writing separate and distinct from the body of the pleadings but may be included at the end of any pleading with an appropriate heading, and, where a certificate of service is required, immediately preceding same.

Appellant concedes that his prayer for a jury trial in the original appeal from the order of the Workmen's Compensation Commission which was docketed in Case No. 18011 Law and which involved the employer-insurer was not in proper form. Appellees concede that the prayer for a jury trial in the second appeal, docketed as Case No. 18427, was in the form required by Rule 343 (b). Appellant contends he is entitled to a jury trial as to all defendants, but, at the very least, urges-that he is entitled to a jury trial as against the Subsequent Injury Fund. We do not agree.

Rule 343(e) provides that in an appeal from the Workmen’s Compensation Commission or other administrative body where a party is entitled to a trial by jury, the election shall be made by either party within 15 days after the appeal has been filed in the trial court. Considering the two sections together, it is obvious the election for a jury trial must be made within the time limit specified by Rule 343 (d) and in the form prescribed by Rule 343 (b).

The failure of the appellant to comply with the rule originally amounted to a waiver of his right to a jury trial. Duignan v. United States, 274 U. S. 195, 198, 47 S. Ct. 566, 71 L. Ed. 996 (1927); Bringe v. Collins, 274 Md. 338, 335 A. 2d 670 (1975); Houston v. Lloyds, 241 Md. 10, 14, 215 A. 2d 192 (1965). The impleading of the Subsequent Injury Fund and the attempt to create a second appeal did not cure the waiver. This controversy involves one claim of a compensable injury against one employer-insurer. The fact that the amount that might be recovered by the employee could have been affected by the impleading of the Subsequent Injury Fund did not change the unitary nature of the proceedings. We conclude that the claimant is not entitled to a jury trial as against either of the appellees in this case.

Remanded to trial court for further proceedings consistent with this opinion.'

Costs to be divided between appellant and appellees.

      . The court’s decision as to the claimant’s right to a jury trial is appealable because that right is a constitutional one and an appeal lies from any order which decides an absolute constitutional right. Condon v. Gore, 89 Md. 230 (1899). The order directing the trial to be tried in two parts is not ordinarily an appealable order, but since the cause must be remanded we shall consider the issue as guidance for the courts and the litigants.


author: Couch, J.,

text:
    CHARLES EDWARD ATKINS v. STATE OF MARYLAND
    [No. 126,
    September Term, 1978.]

      Decided October 16, 1978.

    The cause was argued before Davidson, Wilner and Couch, JJ.

      Michael R. Mallcy, Assistant Public Defender, with whom was Alan H. Murrell, Public Defender, on the brief, for appellant.

      Ray E. Stokes, Assistant Attorney General, with whom were Francis Bill Burch, Attorney General, Robert S. Rothenhoefer, State’s Attorney for Frederick County, and Mary Ann Stepler, Assistant State’s Attorney for Frederick County,, on the brief, for appellee.
   Couch, J.,

delivered the opinion of the Court.

Charles Edward Atkins was found guilty in a jury trial in the Circuit Court for Frederick County of breaking and entering and malicious destruction of property. He was sentenced to three years incarceration for the breaking and entering and a concurrent three year sentence for malicious destruction of property, both sentences to run consecutive to a sentence then being served on a prior conviction.

The record shows that around 7:30 P.M. on November 4, 1976, the rear door of the business establishment of Ritchie Associates was forcibly pried open and an attempt made to open a safe contained on the premises. During this attempt the door hinges of the safe were damaged, as well as the door itself. Upon discovery of this by a building janitor, the police were notified and responded to the general scene. One of the police officers, arriving in the general vicinity, testified he observed appellant walking on the sidewalk, in the general area of the crime.

Later that same night appellant and two others were arrested on a Sears store parking lot and detained. Appellant was ultimately charged, tried, and convicted of being a rogue and vagabond in connection with the arrest near Sears, for which he was incarcerated at the. time of his trial for breaking and entering the Ritchie Associates premises. After being arrested on this charge, the police obtained his clothing and sent it to the F.B.I. Lab for testing. The F.B.I. Lab technician testified that he found particles of material identical to the insulation obtained from the safe itself, in the clothing obtained from appellant.

Appellant, testifying in his own behalf, denied any involvement in the breaking and entering of Ritchie Associates. He testified that he had been riding around since about 6:30 P.M. with two friends, until they were arrested near Sears around midnight. He denied ownership of the pants which the F.B.I. Lab had tested and which were found to contain particles of safe insulation. Appellant produced one Charles Brown, who had been arrested with appellant near Sears, as a witness in his behalf. Brown testified that while he, appellant, and Lee Carroll had been riding around, they had begun riding no earlier than 9:00 P.M.

Appellant presents two questions on appeal:

1. Did the trial court err by basing Appellant’s sentence in part on the court’s belief that Appellant had been dishonest in maintaining his innocence at trial?
2. Did the trial court err in denying Appellant’s motion for judgments of acquittal because the evidence was insufficient?

Appellant contends that the trial court erred in weighing his assertion of innocence in his testimony against him in sentencing, citing Johnson v. State, 274 Md. 536, 336 A. 2d 113 (1975), and Herbert v. State, 31 Md. App. 48, 354 A. 2d 449 (1976). Appellant’s contention is based on the trial judge’s articulation of his reasoning during sentencing, where he stated in part:

“You have indicated to me that you have got absolutely no rehabilitation — you came in here and falsified your testimony on the stand, as believed by the jury and as believed by the Court. You even told them that you were running around with Mr. Brown earlier in the evening that this offense occurred, and Mr. Brown came in and denied that. So you just apparently are unwilling to cooperate with society or cooperate with anyone else. Now, normally under most circumstances I would not run a sentence consecutive in a situation like this, where you are charged with what amounted to two breaking and enterings in one evening. But you have demonstrated to me that you are just not going to cooperate, you’re not going to be law-abiding, and therefore the only choice I have is to remove you from society, so society can be protected, and that’s what I intend to do.”

In Johnson, supra, the trial judge, at sentencing, clearly indicated that he felt, as well as the jury, that the defendant lied. He said, “If you had come in here after this happened, before the other trouble you got into — if you had come in here with a plea of guilty and been honest about [it] and said, ‘Of course I did it’, which you did, you would probably have gotten a modest sentence.... But with this attitude that you have you can’t receive that kind of treatment.” The Court of Appeals noted that a trial judge permissibly may take into account a wide range of factors at sentencing, including “the demeanor and veracity of the defendant gleaned from his various court appearances,” so as to effectuate the three broad objectives of sentencing: punishment, deterrence, and rehabilitation. Id. at 540, 336 A. 2d at 115. The Court held, however, that there were restrictions on that wide range of factors, and that the trial judge had exceeded those restrictions by, in effect, penalizing the defendant for his failure to plead guilty. The Court vacated the sentence which had been imposed by the trial judge.

State v. Herbert, supra, presented a somewhat similar question to this Court. The trial judge took into consideration at sentencing the fact that the defendant “has maintained his innocence throughout” the trial and sentencing procedures. This Court, speaking through Judge Lowe, held that the trial judge considered an improper factor in sentencing. We said:

“The mandate of Johnson is clear. The protestations of innocence throughout the trial must not influence sentencing ‘in any way’.”

Id. at 56, 354 A. 2d at 453.

The Supreme Court of the United States considered a similar set of facts in United States v. Grayson, 438 U. S. 41, 98 S. Ct. 2610, 57 L.Ed.2d 582 (1978). There the trial judge, in giving his reasons for the sentence imposed, indicated that “... it is my view that your defense was a complete fabrication without the slightest merit whatsoever. I feel it is proper for me to consider that fact in the sentencing and I will do so.” The Supreme Court held that the defendant’s truthfulness or mendacity was relevant to sentencing in that it showed the defendant’s attitudes toward society and prospects for rehabilitation. The Court further held that consideration of the defendant’s truthfulness in sentencing neither constituted punishment for a crime — perjury — for which he was not convicted, nor did such consideration impermissibly “chill” a defendant’s right to testify in his own behalf.

Johnson and Herbert are distinguishable from both the case at bar and Grayson. The extent of Johnson’s holding was that the trial judge could not weigh against the defendant at sentencing his election to forego a plea of guilty and be tried by a jury. Herbert is limited to any negative consideration of a defendant’s protestations of innocence. The trial judge in the case at bar considered neither the defendant’s election to be tried nor his protestations of innocence in sentencing. What the trial judge considered was the fact that he felt (and, apparently, so did the jury) that the defendant lied under oath.

The distinction we make between this case and Herbert is a fine one, but nonetheless important. We reaffirm the holding in HerbertthaJ the trial judge may not weigh against the defendant, at sentencing, his protestations of innocence throughout the proceedings. We hold in this case, however, that while an accused may always protest his innocence, he may not make any other statement which is false, and, if he does, then the trial judge may consider such fact in fixing an appropriate sentence.

In Grayson, the Supreme Court furnished some light to enable a clear view of this distinction:

“The right guaranteed by law to a defendant is narrowly the right to testify truthfully in accordance with the oath — unless we are to say that the oath is mere ritual without meaning. . . . Assuming, arguendo, that the sentencing judge’s consideration of defendant’s untruthfulness in testifying has any chilling effect on a defendant’s decision to testify falsely, that effect is clearly permissible. There is no protected right to commit perjury.”

Supra at 54, 98 S. Ct. at 2618, 57 L.Ed.2d at 592.

The facts in this case indicate that the trial judge negatively-considered only appellant’s truthfulness, not his assertions of innocence, in imposing sentence. Accordingly, we find no error.

(2)

We have said in the past that when this question is presented to us it is our duty to review the sufficiency of the evidence to sustain the conviction and, in so doing, we do not inquire into and weigh the evidence to ascertain whether the State has proved its case beyond a reasonable doubt but determine only if there is any relevant evidence adduced at the trial which would properly sustain a conviction. Spease v. State, 21 Md. App. 269, 304, 319 A. 2d 560, 579 (1974), aff'd, 275 Md. 88, 338 A. 2d 284 (1975). It is axiomatic that the test to be used in determining the legal sufficiency of the evidence to sustain a conviction is whether the evidence shows directly, or supports a rational inference of the facts to be proved from which the trier of facts could fairly be convinced, beyond a reasonable doubt, of the defendant’s guilt of the offense charged. Metz v. State, 9 Md. App. 15, 262 A. 2d 331 (1970).

The issue before us is not whether the two offenses were committed, but whether they were committed by the appellant. With the evidence before it of the appellant being seen near the scene shortly after the discovery of the crime, and the finding of identical safe insulation material in his clothing as that contained in the subject safe, we have no difficulty concluding that the jury could have fairly inferred that appellant was guilty of the offenses beyond a reasonable doubt.

Judgments affirmed.

Costs to be paid by appellant.

      . The Court holding in Johnson is limited to that narrow area described :— taking into consideration the defendant’s failure or election not to plead guilty. While the trial judge’s remarks may be read to involve other factors, the Court resolved the doubt in favor of the defendant in finding that the trial judge had used this impermissible consideration.