author: Gilbert, C. J.,

text:
    MARYLAND PORT ADMINISTRATION v. I.T.O. CORPORATION OF BALTIMORE
    [No. 176,
    September Term, 1978.]

      Decided December 6, 1978.

    The cause was argued before Gilbert, C. J., and Melvin and Couch, JJ.

      Robert B. Harrison, III, Assistant Attorney General, with whom were Francis Bill Burch, Attorney General, William M. Huddles, Assistant Attorney General, and Robert R. Winter, Assistant Attorney General, on the brief, for appellant.

      Amicus curiae brief filed" by Allied Chemical Corporation, K. Donald Proctor on the brief.

      RobertH Williams, Jr., and PaulB. Lang, with whom were Niles, Barton & Wilmer on the brief, for appellee.
   Gilbert, C. J.,

delivered the opinion of the Court.

This case involves the Second Battle for the Port of Baltimore. It is not, however, being waged between a British fleet and soldiers under the command of Major General Samuel Smith, but rather between the Maryland Port Administration (MPA) and a stevedoring and terminal operating company, I.T.O. Corporation of Baltimore (ITO). The battle is not being fought by cannon and shot but by counsel and contract. The objective of the parties is, nevertheless, somewhat the same as that of September 1814, but the motivation is vastly different. Admiral Cochrane, after the successful sacking of Washington, D.O., expressed his desire to lay Baltimore “under a severe contribution.” ITO is,determined to require MPA to pay to ITO the sum of $213,601.17, but instead of being met by 15,000 defenders armed with various weapons, they were confronted with the invisible and, when applicable, invincible shield of sovereign immunity. The Superior Court of Baltimore City brushed aside MPA’s defense, and a jury of that court rendered a verdict against MPA in the amount of $213,601.17. It would appear that ITO succeeded where the British failed, but the “perilous fight” was not ended with the jury’s verdict. The MPA has appealed.

In this Court it asserts:

I. The trial court should have granted MPA’s motion raising preliminary objection on the basis of sovereign immunity.
II. The trial judge should have excluded oral evidence concerning ITO’s intention or understanding of a contract dated January 13, 1971.
III. The jury should have been instructed that testimony grounded on memory of oral statements made with a person since deceased “should be received with great caution and if a long time has elapsed since the alleged statements, such testimony is held to be unsatisfactory and inconclusive.”

If MPA’s first attack is successful, they carry the day, and we need not respond to the other two sorties. Before discussing the merits of the appeal, we shall set the stage upon which this drama was played.

MPA is clothed by statute, Md. Transportation Code Ann. § 6-204 (i) with authority to “construct, reconstruct, rehabilitate, improve, maintain, lease as lessor or as lessee, repair, and operate port facilities within its territorial jurisdiction____” Under full color of its powers, MPA has developed the Dundalk Marine Terminal within Baltimore Harbor. Among the terminal services provided by ITO is the partial loading and unloading of cargo from trucks. The performance of such services is referred to in the industry as “tailgate service.” ITO “tailgated” for MPA at the Dundalk terminal under a “tariff” filed by MPA with the Federal Maritime Commission.

On February 1, 1967, MPA and ITO entered into a written contract which spelled out a billing procedure whereby MPA then paid ITO in accordance with the agreement. In short, MPA, for a fee, acted as the billing and collection agent of ITO.

The 1967 contract provided in pertinent part:

“I. Truck Freight
A. Export
(5) Maryland Port Authority will be responsible for the billing and collection in accordance with the prevailing tariff charges.
“(6) Maryland Port Authority will verify ■ each day, with representative of subcontractor, the total amount of truck tonnage handled that day and service provided.
NOTE: All billing on verified information will be final.
(7) Subcontractor will bill Maryland Port Authority semi-monthly covering the period of the first 15 days or the last 15 days of each month for the unloading service calculated at the total tons handled multiplied by the rate of $1.68 per ton for tailgate service or $3.68 per ton for full unloading service.
EXCEPTION: Commodities on which a negotiated rate is permitted will be billed by the Maryland Port Authority at the rate supplied by the subcontractor including 32 cents per ton.
(8) The Maryland Port Authority will remit the amount billed by the subcontractor within 30 days.” (Emphasis supplied.)

With respect to “imports,” the wording of the contract was identical except for the changing of “export” to “import,” “received” to “delivered,” and making other verb modifications indicative of the distinction between shipping and receiving.

The tariff alluded to in the quoted agreement at I. A. (5) was a terminal operator’s tariff published by the Baltimore Marine Terminal Operator’s Association (BMTA), and it was binding on both MPA and ITO. The tariff provided published rates for truck loading and unloading, including a per ton charge. It also provided for a minimum charge per bill of lading when the cargo was less than one ton.

A new billing procedure agreement was entered into between MPA and ITO in January 1971, effective February 5, 1971, replacing the 1967 agreement. The 1971 agreement, containing the seeds of the not-so-friendly strife leading to this litigation, was similar to the 1967 agreement except with respect to part I. A. 7. The section provided:

“I. Truck Freight
A. Export
(7) Subcontractor will bill Maryland Port Authority semi-monthly, covering the period of the first 15 days or the last 15 days of each month, for the unloading service performed. Reimbursement will be calculated by multiplying the total tons handled in the period by the prevailing tariff charges and deducting therefrom $.03 per ton service charge. EXCEPTION: Commodities on which a negotiated rate is permitted will be billed by Maryland Port Authority at the rate supplied by the subcontractor subject to the calculations enumerated above.” (Emphasis supplied.)

The section of the contract dealing with “imports” read in the same way except for the change from “export” to “import” where applicable.

Subsequent to the execution of the 1971 agreement, MPA withdrew from BMTA. It then published its own tariff. Both the BMTA and MPA tariffs contained a rate per ton and a minimum rate per bill of lading. When ITO did its own billing prior to 1967, it collected the minimum rate as per the tariff. The former vice-president of ITO told the jury that the purpose of the minimum charges was to compensate ITO for its labor and equipment costs, and that it was as expensive to handle one hundred pounds as it was one ton.

Following the effective date of the 1967 agreement, MPA billed shippers on the basis of the per ton rate when applicable and on the basis of the minimum charge per bill of lading, when the flat ton rate was inapplicable. MPA made remittances to ITO by multiplying the total tons handled by the dollar amount set out in the 1967 agreement and, under the 1971 agreement, by the per ton rate set out in the applicable tariff.

What MPA did not do is to account to ITO for the minimum charges per bill of lading. MPA explained at the trial that the minimum charges were included in the tariff in order to compensate it for the cost of billing and collecting for relatively small shipments. Added to the invoices which were sent to the shippers by MPA was a nominal terminal service charge. MPA contended that such a charge compensated it for the cost of maintaining the roads and other terminal facilities.

Over the objection of MPA, a former vice-president of ITO was allowed to testify that he negotiated the 1967 and 1971 agreements with the then Director of Transportation, and that while nothing was ever said about the minimum bill of lading charges, it was the intent of the parties that those charges would be remitted by MPA to ITO. MPA was limited to a $.03 per ton service charge for billing and collecting from the various shippers. The trial judge permitted that parol evidence because it served to explain the ambiguity in the 1971 agreement relative to the minimum charges.

The former ITO vice-president informed the jury that he had always assumed that MPA was remitting the minimum charges to ITO and that it was not until after he left the company and a new accounting method was installed that it was learned that MPA was not accounting to ITO for those minimum charges. ITO unsuccessfully demanded payment from MPA. This law suit in assumpsit followed.

I.

The principal thrust of this appeal is MPA’s assertion that its motion raising preliminary objection on the ground of sovereign immunity should have been granted.

That doctrine, sometimes alternatively styled “governmental immunity,” stems from the Common Law. Herilla v. Baltimore City, 37 Md. App. 481, 378 A. 2d 162 (1977). The Court of Appeals, in Brohawn & Bros., Inc. v. Board of Trustees of Chesapeake College, 269 Md. 164, 165, 304 A. 2d 819, 820 (1973), speaking through Judge Digges, explained the doctrine thusly:

“[A] litigant is precluded from asserting an otherwise meritorious cause of action against this sovereign State or one of its agencies which has inherited its sovereign attributes, unless expressly waived by statute or by necessary inference from such a legislative enactment.”

Numerous Maryland appellate decisions have discussed the concept of governmental immunity from its origin to the present time. See e.g., Board v. John K. Ruff, Inc., 278 Md. 580, 366 A. 2d 360 (1976); American Structures v. City of Baltimore, 278 Md. 356, 364 A. 2d 55 (1976); Godwin v. County Comm’rs, 256 Md. 326, 260 A. 2d 295 (1970); Cox v. Anne Arundel County, 181 Md. 428, 31 A. 2d 179 (1943); University of Maryland v. Maas, 173 Md. 554, 197 A. 123 (1938); State v. B. & O. R. R., 34 Md. 344 (1871); Herilla v. City of Baltimore, 37 Md. App. 481, 378 A. 2d 162 (1977); Frosburg v. State, 37 Md. App. 18, 375 A. 2d 582 (1977). See also I. F. Pollock and F. Maitland, The History of the English Law, 518 (3d ed. 1909); 36 Md. L. Rev. 654 (1977). The rationale for the continued application of the doctrine in Maryland seems to have begun to shift from the concept of inherited sovereignty to one of public policy. That, at least, is the way it was expressed by Chief Judge Bartol in State v. B. & O. R. R., 34 Md. 344, 374 (1871) when he wrote:

“This [sovereign] immunity belongs to the State by reason of her prerogative as a sovereign, and on grounds of public policy. Parties having claims or demands against her, must present them through another department of the Government — the Legislature — and cannot assert them by suit in the Courts.” (Emphasis supplied.)

Judge Barnes, in Godwin, revisited State v. B. & O. R. R., supra, and noted that in Maryland the doctrine was bottomed, inter alia, on “public policy.” He went on to note that:

“[W]hen one considers the financial and other pro.blems which might arise if the doctrine of sovereign immunity were not applicable, it is probably wise that our predecessors did apply it in Maryland....” Godwin v. County Comm’rs, 256 Md. at 333, 260 A. 2d at 298. [ ]

Out of the cases has emerged the modern rule iterated in American Structures v. City of Baltimore, 278 Md. 356, 359, 364 A. 2d 55, 56 (1976) and reiterated in Board v. John K. Ruff, Inc., 278 Md. 580, 584, 366 A. 2d 360, 362 (1976) that:

“[A]n action ... brought for a money judgment in contract or in tort against the State or an agency of the State without the State’s consent, actual or implied, . . . must be defended on the ground of sovereign immunity, which cannot be waived unless funds have been appropriated for the purpose or the agency can provide funds by taxation____” (Citations omitted.) (Emphasis supplied.)

The word “taxation” means “l.a. The act or practice of imposing taxes, b. The fact of being taxed. 2. An assessed amount of tax.” American Heritage Dictionary of the English Language (1970). In none of the prior cases has the noun “taxation” been used. All the previous decisions speak of the power or authority “to raise money for the purpose of paying damages.” University of Maryland v. Maas, 173 Md. at 558-560, 197 A. at 125 (1938). See Calvert Associates v. Department of Employment and Social Services, 277 Md. 372, 357 A. 2d 839 (1976); Brohawn v. Board of Trustees, supra; Jekofsky v. State Roads Comm'n, 264 Md. 471, 287 A. 2d 40 (1972); Stanley v. Mellor, 168 Md. 465, 178 A. 106 (1935); Dunne v. State, 162 Md. 274, 159 A. 751 (1932); Williams v. Fitzhugh, 147 Md. 384, 128 A. 137 (1925); Fisher & Carozza Co. v. Mackall, 138 Md. 586, 114 A. 580 (1921); State v. Rich, 126 Md. 643, 95 A. 956 (1915); Weddle v. School Comm’rs, 94 Md. 334, 51 A. 289 (1902); State v. B. & O. R. R., supra. Thus, we believe the Court, in American Structures and Ruff, employed the word “taxation” in a non-technical or imprecise sense to mean the ability or power to raise funds. In any event, it is not necessary that the agency possess the power to tax. All that is required is that two specific criteria be met: first, the Legislature must have explicitly or implicitly removed the protective barrier of governmental immunity from the agency, and second, the agency either has the funds from which it can pay the claim or it possesses the power to raise those funds. Brohawn v. Board, supra.

Former Md. Ann. Code art. 62B, § 5, in effect at the time of the signing of the 1967 and 1971 agreements, provided that MPA was “(b) To have perpetual succession, and to sue and be sued in its own name and plead and be impleaded.” (Emphasis supplied.)

That language satisfied the first requirement of Brohawn and Ruff. There yet remains the question of whether MPA has funds available to pay a judgment against it or whether it possesses the power or authority to raise those funds.

When the Legislature created the MPA by Laws 1956, Extra Session, ch. 2, then codified as Md. Ann. Code art. 62B, § 13 (a), it conferred upon the Authority sweeping powers to generate and expend funds. In fact, the MPA’s money raising activities were without supervision or regulation by any other agency of the State.

Article 62B, § 13 (a) provided:

“The authority is hereby authorized to fix, revise, charge and collect rentals, rates, fees or other charges for the use of each project.... Such rentals and other rates, fees and charges shall be so fixed and adjusted in respect of the aggregate thereof from the projects under the control of the Authority as to provide funds sufficient with other revenues, if any, (i) to pay the Authority’s current expenses ..., and (iv) to provide funds for paying the cost of enlarging, extending, reconstructing or improving any project or projects. Such rentals and other rates, fees, and charges shall not be subject to supervision or regulation by any department, division, commission, board, bureau or agency of the State or any political subdivision thereof.” (Emphasis supplied.)

“Current expenses” were defined in section 4 (d) of article 62B to mean:

“[T]he Authority’s reasonable and necessary current expenses of maintaining, repairing and operating the projects and shall include, without limiting the generality of the foregoing ... ordinary and usual expenses of maintenance and repair which may include expenses not annually recurring, expenses incurred in the performance of its powers and duties under the provisions of this Article, and any other expenses required to be paid by the Authority under the provisions of any trust agreement securing revenue bonds or by law....” (Emphasis supplied.)

An inquiry by the first Chairman of the MPA to the Attorney General as to the extent of the Authority’s fiscal responsibility, brought the following reply:

“It is apparent from the broad scope of powers given to the Port Authority ... that the Authority was intended to operate with a substantial degree of independence in order that it might carry out its functions with the flexibility ordinarily found in business concerns____
... Article 62B, as enacted ... is obviously-intended, in spite of the above provisions generally applicable to all state agencies, to permit the Port Authority to establish its own budget in any manner it may see fit.... [I]tis apparent that the Legislature intended that the Authority not be subject to a preliminary budget, but rather that the funds specifically made available to theAuthority, to which funds the Authority is limited, be budgeted as the Authority alone should see fit....” (Emphasis supplied.) 41 Op. A. G. 301, 301-02 (1956).

Aided materially by Allied Chemical Corporation, in the role of amicus curiae, ITO argues that the power and discretion vested in the Authority to raise funds in pursuit of its business set it “apart from virtually all other State agencies,” and, therefore, “[tjhatthe discharge of a judgment arising from an action on a contract validly entered into” by the parties “is within the purposes set forth above for expenditures by the Authority.”

We think it beyond serious doubt that under terms of the Act creating it, MPA had either the “funds sufficient with other revenues ... (i) to pay the Authority’s current expenses,” or the means by which it could acquire such funds. We conclude that when it originally created the Maryland Port Authority, the Legislature explicitly satisfied the first prong of Broha wn-Ruffbj expressly authorizing MPA to sue and be sued. At the same time, it implicitly met the test of Brohawn-Ruffs second prong by permitting MPA fiscal autonomy. Consequently, at the time MPA entered into the contracts with ITO, MPA was more akin to a private business enterprise than a governmental agency. The armor of immunity, usually attendant on State agencies, had been removed by the General Assembly.

The 1970 Session of the General Assembly stripped the fiscal autonomy from MPA and cloaked it with governmental immunity when it abolished MPA as the Maryland Port Authority and created the Maryland Port Administration as an agency of the Maryland State Department of Transportation. Laws 1970, ch. 526, § l.

The broad autonomous powers of the Authority were denied the Administration. “[A]ll powers, duties, and functions vested in the Maryland Port Administration” were made “subject to the authority of the Secretary of Transportation and the Maryland Transportation Authority [(MTA)]. . . .” The Secretary or MTA, however, was allowed to “dispense with ... [the] power of approval” and to permit the MPA “to proceed ... without obtaining prior approval to the extent that the Secretary or ... [MTA] deem[ed] appropriate.” Laws 1970, ch. 526, § 5.

We have not been cited to, nor have we found, any rule or regulation promulgated by the Secretary that is germane to the issue of the authority of MPA to retain funds to pay claims against it or to raise money to so do. It appears that the monies received by MPA, except those pledged to secure revenue bonds, have been required since July 1, 1971, to be deposited into a trust fund whose creation was mandated by Laws 1970, ch. 526, § 2. That section provides:

“[E]xcept for rentals, rates, fees, tolls or any other charges or revenues pledged to secure revenue bonds of prior issues,... and except for other funds by law expressly applied to some other purpose or declared exempt from the provisions of this section, there shall be transferred to the credit of such Fund for the account of the Department all funds theretofore held for the account of any of the agencies, administrations, authorities, commissions, boards, instrumentalities and offices of the State government either included within the Department of Transportation or abolished under Article 41 of the Code. Thereafter, except with respect to ... other funds by law expressly applied to some other purpose or declared exempt from this section, there shall be credited to such Fund for the account of the Department any and all taxes, fees, charges and revenues of whatever kind collected or received by, paid or appropriated to, or to be credited to the account of, the Department or any of its constituent agencies or administrations, in the exercise of their rights, powers, duties, obligations or functions, including, but not by way of limitation, and general fund appropriations, the proceeds of any State loan made for transportation purposes and any federal grants for such purposes....” []

Expenditures from the Fund are made by the Secretary of the Department or MTA. Neither is a party to this litigation. MPA further contends, pointing to Md. Ann. Code art. 94A, §11 (d), that expenditures from the Fund are limited to its revenue bond debt service requirement, “any lawful purpose related to its rights, powers, duties and obligations,” the operating expenses of the Department, and “the costs of any transportation facilities including their maintenance and repair. Such expenditure shall be made in accordance with appropriation provided in any applicable budget bill or supplement appropriation bill....” (Emphasis supplied.) MPA reasons that inasmuch as no appropriation, adopted by the General Assembly, has been included in any budget bill or supplemental appropriation to pay ITO’s claim, funds are not available to pay the judgment, and, therefore, the argument that governmental immunity has been waived falls short of meeting the second prong of the Brohawn-Ruff test.

That argument leads to the rhetorical question of whether the State may create an agency, bestow virtual fiscal autonomy upon it, deny it the defense of governmental immunity, permit it to enter into contracts, subsequently abolish the agency, establish a successor agency cloaked with immunity, and thereby prevent a party who dealt with the predecessor from recovering through judicial proceedings monies due.

The answer to that question was handed down by the Supreme Court of the United States years ago in Memphis R.R. v. Tennessee, 101 U. S. 337, 25 L. Ed. 960 (1879). The majority adopted, through Mr. Chief Justice Waite, the view that when, as here, the State has allowed itself to be sued on a contract, a subsequent withdrawal of that privilege was not an impairment of contract within the meaning of the Constitution because the courts were powerless to enforce a remedy. Implicit in the impairment of contract clause of the Constitution is the ability to enforce a remedy, and where the court is without power to enforce the contract there is no impairment in the constitutional sense.

At the same term of court, October 1879, the Supreme Court considered a case arising from Alabama. That State had enacted a statute which allowed itself to be sued in its own courts. During the time that the statute was in effect a contract was entered into between the State and a railroad company. Alabama law also provided “that if a judgment should be rendered against the State, it was the duty of the Comptroller ... to issue his warrant for the amount....” The railroad commenced proceedings while those statutes were in force. Before judgment was entered the laws were repealed and the trial court dismissed the action for want of jurisdiction. The State’s highest court affirmed. Relying upon its earlier decision of Memphis R.R. v. Tennessee, supra, the Supreme Court said that it was “unable to see any substantial difference between” the Alabama and Tennessee cases. The Chief Justice noted, “In neither State has there been granted such a remedy for the enforcement of the contracts of the sovereignty as may not, under the Constitution of the United States, be taken away.” South and North Ala. R. Co. v. Alabama, 101 U. S. 832, 835, 25 L. Ed. 973 (1879). Similar decisions of the Supreme Court are Home Building & Loan Assoc. v. Blaisdell, 290 U. S. 398, 54 S. Ct. 231, 78 L. Ed. 413 (1934); Baltzer v. North Carolina, 161 U. S. 240, 16 S. Ct. 500, 40 L. Ed. 684 (1896); In re Ayers, 123 U. S. 443, 8 S. Ct. 164, 31 L. Ed. 216 (1887); Beers v. Arkansas, 61 U. S. 527, 15 L. Ed. 991 (1857); See also U.S. Trust Co. of N. Y. v. New Jersey, 431 U. S. 1, 97 S. Ct. 1505, 52 L.Ed.2d 92 (1977); El Paso v. Simmons, 379 U. S. 497, 85 S. Ct. 577, 13 L.Ed.2d 446 (1965); L. Tribe, American Constitutional Law §§ 9-6, 9-7 (1978).

The rule that is gleaned from the Supreme Court decisions is that the State may waive immunity, enter into a contract and later rescind or repeal the waiver of immunity. Such action does not violate the Constitutional ban on impairment of contract because where there is no judicial remedy of enforcement, there is no contract within the meaning of Article 1, § 10 of the Constitution. 16 Am. Jur. 2d Constitutional Law §§ 459-460.

SUMMARY

Where, as here, a State agency is statutorily divested of the right to invoke the defense of governmental immunity, and it enters into a contract, which it subsequently breaches, the Legislature may, by another statute, throw a blanket of governmental immunity over the agency so as to preclude recovery. That action by the State is not violative of the “impairment of contract” clause of the Constitution, and those who contract with the State stand in harm’s way because they rely solely on the faith and credit of the State. Recompense, if any there be, for the State’s breach of contract must come from the Legislature, not the courts.

We hold that MPA’s motion raising preliminary objection should have been granted. It follows that the judgment must be reversed. In view of our holding, we do not reach the other issues raised by the appellant.

Judgment reversed.

Costs to be paid by appellee.

      . The actual battle occurred September 12-13,1814, and is usually called the Battle of Port McHenry, although it was a battle to capture Baltimore, “the most democratic town and ... the richest in the Union.” Attributed to Admiral Sir Alexander Cochrane by Walter Lord in The Dawn’s Early Light, (1972) ch. 8. Port McHenry was under the direct command of Major George Armistead. Id. ch. 11.

      . .Commander of the 3rd Division of Maryland Militia, “the main body of .troops in the area.” Id. ch. 9.

      . .When it was first created by Laws 1956, Special Session, ch. 2, § 1, the MPA was known as the Maryland Port Authority. Its name was changed to Maryland Port Administration by Laws 1970, ch. 526, § 1, at which time it became a part of the Department of Transportation, Md. Transp. Code Ann. § 6-201.

      . When the parties commenced doing business together, ITO was known as Jarka Corporation. It later changed its corporate name.

      . Inasmuch as “prize money” was divided among the command, apparently in proportion to rank, it was considerably more profitable to accept “contribution,” than to destroy. According to Mr. Lord, the City of Alexandria “contributed” to the British to avoid a fate similar to that of the Nation’s capítol.

      . Allied Chemical Corporation was permitted, by order of this Court, on June 23, 1978, to file an amicus curiae brief. The amicus urges us to affirm the judgment of the trial court. The amicus is influenced in no small measure by a 85,000,000 claim against MPA and, needless to say, would like to see the defense of sovereign immunity rejected.

      . “MPA,” as used in this sentence, includes both the M. P. Authority and the M. P. Administration.

      . It was legally necessary for MPA to have some tariff in effect, whether its own or one issued by a group of which it was a member, in order that MPA could bill for terminal services provided by ITO and for its own terminal service charge. See Federal Maritime Commission Order 15, dated October 15, 1965, 46 CFR § 538 (1978).

      . MPA presented testimony through its Comptroller that while only 3% of all tonnage handled involved minimum charges, 75% to 80% of the invoices sent were for those charges.

      . Mr. Philip G. Kraemer was the Director of Transportation at the time. Mr. Kraemer died in 1973.

      . The doctrine is not without its critics. See Clarke, Municipal Responsibility in Tort in Maryland, 3 Md. L. Rev. 159 (1939); Borchard, Government Liability in Tort, 34 Yale.L. J. 1 (1924); Prosser, Law of Torts §§ 131 and 975-87 (4th ed.). See also Frosburg v. State, 37 Md. App. 18, 25, 375 A. 2d 582, 587 (1977) n. 6, wherein Judge Liss said:
      “That the Legislature is aware of the problems created by the application of the doctrine is evidenced by the recent enactment of Cnagter 450 of the Laws of Maryland effective July 1,1976, which provides that in the absence of a provision to the contrary neither the State, its officers, departments, agencies, boards and commissions, nor any municipal corporation or unit of municipal government, nor any county or unit of county government may raise the defense of sovereign immunity in an action based on a certain written contract brought within one year after the claim arose or the contract was performed whichever is later.”

      . The Legislature, in its 1976 Session, abolished the defense of governmental immunity in an action based on contract, provided it is brought within one year from the time the claim arose, and, further, provided there is no specific provision proscribing action. Laws 1976, ch. 450. The lowering of the protection shield so as to permit, under the specified conditions, suits against the State for breach of contract does not help ITO in the matter sub judice. This is so because Laws 1976, ch. 450 mandates that it applies only to contracts entered into or executed on or after July 1, 1976.

      . Md. Transportation Code Ann. § 6-204 (b) now reads:
      “The Administration may sue and be sued in its own name.”

      . Robert W. Williams, Esq.

      . Hon. C. Ferdinand Sybert.

      . ¡See n. 6 supra. The claim is for “damages ... resulting from the Port Administration’s refusal to accept for disposal... chrome ore by-product.” Obviously, Allied is waiting to storm the port if the rampart of governmental immunity is razed.

      . Laws 1956, Extra Session, ch. 2.

      . The Department of Transportation was codified in Md. Ann. Code art. 41, §§ 207-208D and elsewhere m the Code. Codified statutes dealing with the Department are now found in the Transportation Article of the Code, per Laws 1977, ch. 13, § 1, effective July 1, 1977.

      . Then codified as Md. Ann. Code art. 94, § 11a.

      . The “Transportation Trust Fund,” in substantially modified form, now appears in Md. Transportation Code Ann. § 3-216.

      . Justices Swayne and Strong dissented.

      . “A rightful judgment against a state, on the other hand, gives a vested right which cannot be taken away, pending writ of error, by a repeal of the statute which authorized the state to be sued.” 16 Am. Jur. 2d § 460, citing McCullough v. Virginia, 172 U. S. 102, 19 S. Ct. 134, 43 L. Ed. 382 (1898).


source: Caselaw Access Project

author: MacDaniel, J.,

license: Public Domain

text:
    CARL H. EZERSKY v. ELIZABETH EZERSKY
    [No. 219,
    September Term, 1978.]

      Decided December 7, 1978.

    The cause was argued before Melvin, Mason and MacDaniel, JJ.

      Eugene I. Glazer for appellant.

      Larry W Newell, with whom was Kenneth L. Johnson on the brief, for appellee.
   MacDaniel, J.,

delivered the opinion of the Court.

The appellant in this case, Carl H. Ezersky, challenges the action of the Circuit Court of Baltimore City in granting the petition of the appellee, Elizabeth Ezersky, and removing the child custody portion of the pending divorce case to the Circuit Court for Baltimore County.

The appellee was formerly married to George Diering, and Sally Ellen Diering was born of that marriage. The appellee was divorced from George Diering by a decree of the Circuit Court for Baltimore County dated March 18, 1970, and she was awarded custody of the above minor child, subject to the continuing jurisdiction of that court. After an intervening marriage and divorce, the appellee married the appellant on November 19, 1974. The appellant and appellee separated in 1975, and on July 1, 1976, they entered into a separation agreement which, among other things, stipulated that the minor child, Sally Ellen Diering, could continue to reside with the appellant as long as she desired. On March 10, 1977, the appellant filed for divorce a vinculo matrimonii from the appellee in the Circuit Court of Baltimore City. Subsequently, on August 19, 1977, he amended the complaint and sought temporary and permanent custody of Sally Ellen Diering. On the same day, the court, in an ex parte proceeding without notice to the appellee’s counsel, granted the appellant temporary custody of the child. The appellee then petitioned the court to remove the portion of the case relating to child custody to the Circuit Court for Baltimore County. On December 7, 1977, the petition was granted.

The appellant argues that the lower court did not have the power to remove any portion of the pending case to the Circuit Court for Baltimore County. We agree.

We note, first, that an order granting or denying the removal of a case is final and appealable. Greenberg v. Dunn, 245 Md. 651, 227 A. 2d 242 (1967), and the cases cited therein. Thus, the issue of the lower court’s power of removal is properly before this Court for review.

I.

Part of the appellee’s argument appears to be that removal was appropriate under the “continuing jurisdiction” concept. The lower court emphasized the fact that the Circuit Court for Baltimore County had decided the issue of the custody of the minor child in the previous divorce litigation and that it “presumably has reports and facts available to it.”

We feel, however, the “continuing jurisdiction” arguments are inapposite to this case. Jurisdiction involves the inherent power of a court to decide a case, and it clearly may be had by more than one court at a time, even where jurisdiction by one of the courts is “continuing.” Struzinski v. Butler, 24 Md. App. 672, 332 A. 2d 713 (1975). The real issue in this case is where, among the courts having jurisdiction, the case will be heard, and this is a question of venue. The appellee has not alleged any facts indicating the Circuit Court of Baltimore City did not have jurisdiction over the entire case or that the initial venue selection was not proper. This case must be decided, then, under the established guidelines for the removal of cases to another court.

II.

The appellant correctly argues that there is no “right” of removal in divorce or equity cases, such as the one now before this Court. Under Md. Const, art. IV, §. 8, Maryland Code § 6-204 of the Courts and Judicial Proceedings Article, and Maryland Rule 542, a party has a “right” to have a case removed to another court having jurisdiction if he can show that he cannot have a “fair and impartial trial” in the court in which the action has been initially brought. This statutory and constitutional protection clearly does not apply, however, to equity cases. Link v. Link, 35 Md. App. 684, 371 A. 2d 1146 (1977); Olson v. Love, 234 Md. 503, 200 A. 2d 66 (1964); Cooke v. Cooke, 41 Md. 362 (1875). Therefore, the appellee does not have a “right” to have this case, or any portion thereof, removed from Baltimore City.

III.

The appellee argues that, independent of the above statutory and constitutional provisions, the lower court judge had, and properly exercised, a common law discretionary power (as opposed to statutory duty) to remove the case, or part of it, from the Circuit Court of Baltimore City. This discretion would not be dependent on whether the case was at law or in equity or whether there was a showing that a fair and impartial trial could not be had. We disagree.

First, while Maryland law courts (as opposed to equity courts) do have a common law discretionary power to remove cases, as the appellee alleges, an examination of the cases discussing this power shows that it can only be exercised when a party cannot otherwise have a fair and impartial trial. It cannot be exercised for any other reason.

In Davidson v. Miller, 276 Md. 54, 83, 344 A. 2d 422, 439 (1975), for example, the Court of Appeals, after finding the statutory removal provisions then in effect unconstitutional, stated:

“The effect of this ruling... will in no way deprive or otherwise curtail the circuit courts of the counties or the circuit-level civil law courts of Baltimore City from exercising their common law discretionary power (which is subject to appellate review for abuse) to remove an action to another jurisdiction, within or without the circuit, in order to rid the case of any prejudicial barnacles which, because of local prejudice, passion or interest, may have attached; thus, as near as is reasonably possible, an action’s consideration by a fair and impartial jury can be insured.” (Citations omitted.)

See also Price v. State, 8 Gill 295 (1849), and Negro Jerry v. Townshend, 2 Md. 274 (1852).

In Price v. State, supra, 8 Gill at 310-11, the Court of Appeals explained the origin of this discretionary power:

“It has always been held, that the county courts in this State, being the only courts of record with original common law jurisdiction, can rightfully exercise all the powers exercised in England, by the court of King’s bench, so far as these powers are derived from rules and principles of the common law, and so far as the same are suited to the change in our political institutions, and are not modified by our constitutional or statutory enactments.
“That the court of King’s bench has rightfully exercised this power of removal as an acknowledged, if not an essential part of its ordinary common law jurisdiction, both in respect to criminal and civil cases, does not seem to have been doubted in any of the cases in which its exercise is reported to us,...”

The English common law cases in the Court of King’s Bench which are the basis for the discretionary power of removal at law in Maryland are summarized in Crocker v. Justices of Superior Court, 208 Mass. 162, 94 N. E. 369 (1911). We need not repeat that summary here. It is clear, however, that the only ground for removal ever recognized was the impossibility of having a fair and impartial trial in the original court of law.

The correct understanding of the. Maryland cases such as Davidson, supra, then, is that even if the constitution and statutes of this State did not give to parties a “right” to have a case at law removed, a court would still retain a common law discretionary power to remove a case upon the same showing. The only purpose behind codification of removal at law in this State was to make “the privilege, for the first time, an object of constitutional security, leaving to the legislature no longer the power to deprive a party of its exercise, but only the power of extending it, or prescribing the mode of its exercise.” Price v. State, supra, 8 Gill at 311.

Clearly, the common law discretionary power of removal is never available in an equity or divorce case. As indicated above, this discretionary power originated in the common law Court of King's Bench. It has, accordingly, been inherited by our common law courts. Our equity courts, on the other hand, find their origin in the Court of Chancery and, in the case of divorce, in the Ecclesiastical Courts, Dougherty v. Dougherty, 187 Md. 21, 48 A. 2d 451 (1946). There is no indication that these English courts exercised a discretionary-power of removal, and we are not free to give their successors such a power.

Because removal is only available in courts of law (and not equity) and only upon a showing that otherwise a fair and impartial trial cannot be had, removal should not have been granted in this case.

Judgment reversed.

Costs to be paid by appellee.

      . Md. Const, art. IV, § 8, Removal of causes, provides in part:
      “The parties to any cause may submit the same to the court for determination without the aid of a jury, and in all suits or actions at law,_ issues from the orphans’ court, or from any court sitting in equity, ... pending in any of the courts of law in this State, having jurisdiction thereof, upon suggestion in writing under oath of either of the parties to said proceedings, that such party cannot have a fair and impartial trial m the court in which the same may be pending, the said court shall order and direct the record of proceedings in such suit or action, issue ... to be transmitted to some other court having jurisdiction in such case for trial....”
      Maryland Code § 6-204 of the Courts and Judicial Proceedings Article provides in part:
      “(a) Suggestion under oath. — In actions at law, including issues from the orphans’ court and appeals from the Workmen's Compensation Commission, pending in any of the courts of law in this State, upon suggestion m writing unaer oath of either of the parties to the action and not of counsel, that such party cannot have a fair and impartial trial in that county or judicial circuit in which the same may be pending, the court shall order and direct the record of proceedings in the action to be transmitted to a court of some other county within the circuit or to some other judicial circuit having jurisdiction in the action for trial.”
      Maryland Rule 542 provides in part:
      “a. Right of — Suggestion by Affidavit.

      1. Prejudice in County.
      In an action at law, including issues from the Orphans’ Court and an appeal from the Workmen’s Compensation Commission, pending in any of the courts of law of this State, any party to the action and not counsel, may suggest by affidavit that he cannot have a fair and impartial trial in the county in which the action is pending. If the court finds that there is a reasonable ground for the suggestion, it shall order and direct the record of proceedings in the action to be transmitted to a court having jurisdiction in the action in some other county. Any party, including a party who has obtained removal, may obtain further removal pursuant to this Rule.”
      Other sections of the above statutory provisions give additional procedural requirements which are not in issue in this case.

      . See Bullock v. State, 230 Md. 280, 186 A. 2d 888 (1962) footnote 3, which makes clear that while the language of § 8, Article IV of the Constitution of Maryland provides for removal when issues from an equity court are tried in a court of law, it does not provide for removal from an equity court.

      . The reason for finding the provisions unconstitutional in Davidson and subsequently in Perkins v. Eskridge, 278 Md. 619, 366 A. 2d 21 (1976), does not in any way affect this case, and the problem has since been remedied by the Maryland Legislature.


text:
    PERRY G. BURDETTE et al. v. VINCENT J. LaSCOLA et ux.
    [No. 245,
    September Term, 1978.]

      Decided December 7, 1978.

      The cause was argued before Gilbert, C. J., and Moore and Lowe, JJ.

      James F Martin for appellants.

      Robert R. Michael for appellees.
   Gilbert, C. J.,

delivered the opinion of the Court.

This appeal is concerned with the effort by the Peoples Lumber and Supply Company, Inc., (Peoples), appellant, to avoid financial responsibility under a “completion bond” that it signed on behalf of a builder, Perry G. Burdette, another appellant. The question before us is who is the obligee under the bond. Before undertaking to resolve the issue, a brief history of surety law is in order so as to comprehend better the matter.

Suretyship commenced with the beginning of civilization. References to suretyship are found in the Bible. Although there is evidence of a surety contract as far back as 2750 B.C., and in the Code of Hammurabi, about 2250 B.C., the earliest written contract of suretyship that has been found dates to 670 B.C.

By the year 150 A.D., the Romans had developed “a highly technical law of suretyship.”

The concept of a corporate surety did not evolve in this country until the late 19th Century. The delay in the development of corporate surety may have been related to the fact that the United States, prior to the latter half of the 19th Century, was primarily an agricultural country. It was not until the Industrial Revolution that the corporate surety emerged.

With the emergence of the corporate surety as a business entity, judicially created rules of interpretation of surety bonds came into being. Two of those rules, and the two with which we are most directly concerned in the matter before us, are 1) “to ascertain the intention of the parties and to give effect to that intention if it can be done consistently with legal principles.” Walsh v. Jefferson Federal Savings & Loan Association, 216 Md. 131, 137, 139 A. 2d 847, 850 (1958). See also Levy v. Glens Falls Indemnity Co., 210 Md. 265, 273, 123 A. 2d 348, 352 (1956); Lange v. Board of Education, 183 Md. 255, 260, 37 A. 2d 317, 320 (1944); Hospital for Women v. United States Fidelity & Guaranty Co., 177 Md. 615, 619, 11 A. 2d 457, 459 (1940). 2) The old doctrine of favoring the surety by construing strictly a claim against him does not apply to the business surety. Its liability is to be interpreted liberally. Hospital for Women v. United States Fidelity & Guaranty Co., 177 Md. at 618-19, 11 A. 2d at 459. See also Lange v. Board of Education, supra; American Fidelity Co. v. State, 128 Md. 50, 56, 97 A. 12, 14 (1916); State v. National Surety Co., 126 Md. 290, 293, 94 A. 916, 917 (1915); Aetna Indemnity Co. v. Waters, 110 Md. 673, 699, 73 A. 712, 722 (1909); Smith v. Turner, 101 Md. 584, 587, 61 A. 334, 336 (1905).

For the reasons hereinafter set forth, we think the appellant, Peoples, while admittedly not engaged in the surety business, was, nevertheless, a surety for profit in the instant case. We shall, therefore, liberally construe the bond. Walsh v. Jefferson Federal Savings & Loan Association, 216 Md. at 137, 139 A. 2d at 850; Hospital for Women v. Fidelity Guaranty Co., 177 Md. at 618, 11 A. 2d at 459; Lange v. Board of Education, 183 Md. at 260, 37 A. 2d at 320.

On March 15, 1973, appellees, Vincent J. LaScola and his wife, Lucy, entered into a contract with appellant, Perry G. Burdette, who agreed to build a home for $89,863 on land which the LaScolas owned in the Mt. Airy area of Frederick County. Although the contract contained no completion date or provisions relating to completion, the LaScolas received the impression from John Burdette, the builder’s foreman, that the house would be completed in six months.

The financial transactions involved were succinctly set out in the opinion of the trial judge:

“The LaScolas financed the construction of their house by means of the proceeds of a $60,000.00 loan from Farmers and Mechanics National Bank plus $29,863.00 of their own capital, all of which was held by the bank in an escrow account. As the work proceeded, the bank issued draw checks which were made payable to LaScola, the builder and [Peoples,] the surety. LaScola and the surety endorsed the first four draw checks totalling $71,880 to the builder. After that, when it became apparent the work was not progressing because subcontractors had not been paid, Mr. LaScola used what was left in the escrow account, except for $187.53, to pay subcontractors [directly] in an effort to get the house finished. Furthermore, Mr. LaScola and his family ... did a lot of the work themselves, and he paid out-of-pocket additional sums for labor and material.”

Peoples became involved in the case as a surety as a result of their execution of a completion bond by their predecessor in interest, Peoples Lumber and Supply Company. Farmers and Mechanics National Bank required such a bond as a condition precedent to its making a construction loan available to appellees. Before agreeing to act as surety, Peoples required Perry G. Burdette to pay approximately $40,000 of the $70,000 that he then owed to them for prior purchases of building materials and supplies. By so doing, Peoples became a surety for profit.

Matters did not proceed to appellee’s satisfaction because Burdette did not complete the construction of the house. As a result, LaScola filed a “Bill of Complaint for Specific Performance and Other Relief” on August 8, 1974, in the Circuit Court for Montgomery County, Maryland. An initial order which directed Burdette to complete certain specified items was passed on February 5, 1976, and the case was continued with trial reset for July 6 and 7, 1976. The trial actually occurred on December 8 and 9, 1977. Judge Joseph M. Mathias filed his “Memorandum Opinion and Order” in the case on February 15, 1978. He awarded damages to the appellees as follows:

“For extra labor and materials, to complete the house (plus credit for items not installed) $10,090.62
For additional rent the LaScolas incurred by reason of the builder’s unreasonable delay in completing the house 912.50
For expert witness fees 1,535.00
For attorney’s fees 8,585,00
$21,123.12
Minus balance in escrow account 187.53
Net damages awarded in favor of plaintiffs against both defendants $20,935.59”

Peoples and Burdette noted an appeal where they pose five issues for our review. We shall discuss each in the order they have been put to us.

I.

The threshold question presented by appellants is whether the chancellor erred in awarding judgment to the owners against the surety under the terms and provisions of the completion bond. The completion bond reads as follows:

“KNOW ALL MEN BY THESE PRESENTS, that we, P. G. Burdette, principal, and Peoples Lumber Supply Company, surety, are held and firmly bound unto the FARMERS AND MECHANICS NATIONAL BANK, its successors and assigns, and Vincent J. LaScola and Lucy S. LaScola, his wife, as their interests may appear in the full sum of Eighty-nine Thousand, Eight Hundred Sixty-three ($89,863.00) Dollars, for which sum, we, jointly and severally, for ourselves, our heirs, administrators or executors, promise to pay to the said FARMERS AND MECHANICS NATIONAL BANK, its successors and assigns, and/or Vincent J. LaScola and Lucy S. LaScola, his wife, owners.
“WHEREAS, FARMERS AND MECHANICS NATIONAL BANK has agreed to make to Vincent J. LaScola and Lucy S. LaScola, his wife, owners as above, a loan in the sum of Sixty Thousand ($60,000.00) Dollars, secured by a first mortgage upon the following described real estate in Frederick County, Maryland:
Approximately fifteen (15) acre tract of land located on the east side of Penn Shop Road between Route 80 and Route 27
for the purpose of erecting thereon a dwelling, said loan to be payable in certain installments, which loan was made only upon the condition that the said owners as above, complete the said dwelling according to plans and specifications accompanying the application for said loan, and save harmless and protect the said FARMERS AND MECHANICS NATIONAL BANK against all liens for labor and/or material, which might be placed upon said property.
“AND WHEREAS, the said owners have contracted with the above named principal to complete said building, according to plans and specifications forming a part of said contract.
“NOW, THEREFORE, the condition of the above obligation is such, that if the said principal or principals named above shall fully complete said dwelling according to said plans and specifications and save harmless and protect the said FARMERS AND MECHANICS NATIONAL BANK against all liens for labor and/or material, which may be filed against said property, including all costs, counsel fees, or other expenses incurred, that this obligation is to be void; otherwise, to remain in full force and effect.”

Judge Mathias interpreted the bond as remaining in full force and effect until the principal (Burdette) satisfied the express condition requiring that he “fully complete said dwelling according to plans and specifications.” Because the principal did not complete the house as promised, the surety, Peoples, was held to be liable under the bond.

We believe that Judge Mathias’s decision is supported both by the language of the bond itself and by the applicable case law.

The obligation entered into was to be void “if the said principal or principals named above shall fully complete said dwelling according to said plans and specifications and save harmless and protect the said FARMERS AND MECHANICS NATIONAL BANK against all liens for labor and/or material, which may be filed against said property, including all costs, counsel fees, or other expenses incurred ... otherwise [the obligation was] to remain in full force and effect.”

The chancellor read the quoted language as containing two express conditions. One was that Burdette “fully complete said dwelling”; the other was to “protect the bank from lien claims.”

The dwelling was not completed. Ergo, that condition was not fulfilled, and “the bond remained in full force and effect.” Since the bond was not discharged, “the surety... [remained] liable under it.”

The completion bond states that Peoples, as surety, is liable both to Farmers and Mechanics National Bank and the LaScolas. The relevant portion of the agreement reads:

“KNOW ALL MEN BY THESE PRESENTS, that we ... Peoples Lumber Supply Company, surety are held and firmly bound unto the FARMERS AND MECHANICS NATIONAL BANK ...and Vincent J. LaScola and Lucy S. LaScola... [and we]promise to pay to the said FARMERS AND MECHANICS NATIONAL BANK ... and/or Vincent J. LaScola and Lucy S. LaScola, his wife, owners.” (Emphasis supplied.)

The bond, as Judge Mathias observed, “might... properly be called a ‘dual obligee bond.’ See Aetna Ins. v. Maryland Cast Stone, 254 Md. 109, 118, [253 A. 2d 872, 874 (1969)].” In Aetna, the Court of Appeals had the opportunity to construe the language of a completion bond. The provisions of the bond involved in the Aetna case read as follows:

“’KNOW ALL MEN BY THESE PRESENTS, THAT we, GILBERT CORPORATION, Suite 903 World Building, 8121 Georgia Avenue, Silver Spring, Maryland (hereinafter called the Principal) and AETNA INSURANCE COMPANY, a Connecticut Corporation licensed to do business in the State of Maryland (hereinafter called the Surety) are held and'firmly bound unto PARK HEIGHTS JOINT VENTURE (hereinafter called the Owner-Obligee) and MARYLAND NATIONAL BANK, Baltimore, Maryland 21203 (hereinafter called the Lender-Obligee), their successors and assigns as their respective interests may appear, as Obligees (hereinafter collectively referred to as Obligees), for the use and benefit of claimants as hereinbelow defined, in the sum of FOUR HUNDRED THOUSAND and no/100 DOLLARS ($400,000.00), lawful money of the United States of America, for the payment of which Principal and Surety bind themselves, their estate representatives, successors and assigns, jointly and severally, firmly by these presents.
‘WHEREAS, Principal has entered into a construction contract with Owner-Obligee dated the day of 1965, for the construction of EIGHT STORY APARTMENT BUILDING TO CONTAIN (28) TWENTY EIGHT UNITS, TO BE LOCATED AT 6000 PARK HEIGHTS AVENUE, BALTIMORE, MARYLAND, on Owner Obligee’s premises at 6000 Park Heights Avenue, Baltimore, Maryland, in accordance with plans and specifications prepared by which contract, plans and specifications are by reference made a part hereof, as fully as if recited at length herein.
‘WHEREAS, Lender-Obligee has agreed to lend to Owner-Obligee monies to be secured by a mortgage on the above mentioned premises of Owner-Obligee and to be used in making payments under said construction contract, and Lender-Obligee desires protection as its interest may appear in the event of default by the Principal under said construction contract with Owner-Obligee, said protection to be subject to the performance by the Obligees, or either of them, of the obligations to the Principal as set forth in said construction contract.
‘NOW, THEREFORE, the condition of this obligation is such that, if Principal shall pay all persons who have contracts directly with the Principal for labor and materials furnished pursuant to the provisions of said construction contract, failing which such persons shall have a direct right of action against Principal and Surety under this obligation, and further that, if Principal shall cause all mechanics’ liens filed by reason of non-payment for labor and material furnished in the prosecution of said construction to be discharged of record, then this obligation shall be null and void; otherwise, to be and remain in full force and effect, subject, however, to the following express conditions:
‘1. The Principal and Surety shall not be liable to the Obligees, or either of them, unless the said Obligees, or either of them, make payment to the Principal or, in the event of Principal’s abandonment of project or default, to the Surety, strictly in accordance with the terms of said construction contract as to payments, and perform all the other obligations to be performed under said construction contract at the time and in the manner therein set forth.
‘2. A claimant is defined as one having a direct contract with the Principal or with a subcontractor of the Principal for labor, material, or both, used or reasonably required for use in the performance of the contract, labor and material being construed to include that part of water, gas, power, light, heat, oil, gasoline, telephone service or rental of equipment directly applicable to the Contract.
‘3. The above named Principal and Surety hereby jointly and severally agree with the Obligees that every claimant as herein defined, who has not been paid in full before the expiration of a period of ninety (90) days after the date on which the last of such claimant’s work or labor was done or performed, or materials were furnished by such claimant, may sue on this bond for the use of such claimant, prosecute the suit to final judgment for such sum or sums as may be justly due claimant, and have execution thereon. The Owner shall not be liable for the payment of any costs or expenses of any such suit.’ ” 254 Md. at 113-15, 253 A. 2d at 874-75.

In interpreting that language, the Court held that “[i]n effect, this bond is both a performance and a payment bond: It protects Park Heights and the Bank against non-performance by Gilbert, and protects subcontractors and materialmen against non-payment by Gilbert.” 254 Md. at 116, 253 A. 2d at 875.

By comparison, the completion bond in the present case protects the LaScolas and the Bank against non-performance jby Burdette, and it protects the Bank “against all liens for labor and/or material. . . .” It is, thus, both a performance and a payment bond involving dual obligees.

The bond is hardly a masterpiece of clarity. From the transcript we learn that the bond was prepared in the bank by a typist. Apparently, that person was given a form to copy. The use of forms is often' an initial time-saver but a subsequent waster of time and money.

The general rule is that when a contract or bond is ambiguous the Court must, if it can reasonably so do, ascertain the intent of the parties and give effect to that intent. Walsh v. Jefferson Federal Savings & Loan Association, 216 Md. at 137, 139 A. 2d at 850.

We think that is precisely what Judge Mathias did. Peoples “firmly bound” itself to the bank and to the LaScolas “in the full sum of Eighty-nine Thousand, Eight Hundred Sixty-three ($89,863.00) Dollars.” Peoples expressly promised to pay that sum to the LaScolas or the bank if Burdette failed to perform his contract. Peoples, by undertaking the role of Burdette’s surety, bound itself to pay for Burdette’s shortcomings. In exchange for the payment of $40,000 on a past due account, and possibly additional profits from the sale of its wares to Burdette, Peoples ran the risk of Burdette’s non-performance. They tied themselves, by the bond, to Burdette’s fate and have to suffer the consequences.

We observe no clear error in the trial judge’s finding of fact and no error in his application of the law thereto.

II.

“Was the Chancellor ... [wrong in] holding the surety bound for damages arising out of the work performed under a substantial oral modification of the construction contract where the construction contract expressly provided that all modifications be made in writing? ”

A preliminary hurdle must be cleared, i.e., whether the oral modification was “substantial” as characterized by appellants or “immaterial” as claimed by appellees. The resolution of this question turns on the nature of the modification. It is established doctrine in Maryland that any change which materially alters the principal contract discharges the surety from liability. Prodis v. Constantinides, 167 Md. 33, 37, 172 A. 286, 288 (1934); Chicago Bonding & Insurance Co. v. State, 137 Md. 132, 135, 111 A. 772, 773 (1920); Seventh Baptist Church v. Andrew & Thomas, 115 Md. 535, 540, 81 A. 1, 3 (1911); Aetna Indemnity Co. v. Waters, 110 Md. at 698, 73 A. at 721; Leppert v. Flaggs, 101 Md. 71, 75, 60 A. 450, 451 (1905).

The doctrine applies regardless of whether “the construction contract expressly provided that all modifications be made in writing.” Such a contract provision was contained in the bond involved in Aetna. It read: “The said surety must be notified in writing, and its written consent secured to, any change or alterations made in the original plans or specifications made by the obligee.” 110 Md. at 697, 73 A. at 721. The change made in that case involved a verbal agreement allowing a $30 credit on the contract price because of the omission of a screen partition in the dining room of the building being constructed. “[I]n view of the proportion which the sum of $30 ... is to the whole contract price of $13,506,” the Court of Appeals held that “it might well be regarded as falling within the operation of the principle recognized by many authorities, that slight and immaterial changes in a contract which do not change its legal import will not release a surety.” (Citations omitted). Id. at 698, 73 A. at 721.

In the case now before us, Judge Mathias did not specifically address the question of the impact of the oral modification on the surety’s liability. He did, however, include the damages claimed by appellees as a result of the collapse of the wall which was the subject of the oral modification.

The surety denies liability for those damages. Appellants argue:

“The surety does not contend the oral modification would operate as a total discharge.
The only condition of the construction contract relating to changes and variances provides that such changes must be made in writing. No mention is made in the construction contract or completion bond which requires the consent of the surety. Although we must concede that the surety should have reasonably anticipated minor changes and variations, the surety is hard-pressed to find itself bound to such a substantial variation.”

Whether the modifications concerning the wall which was the subject of the oral agreement were “minor” was a question of fact for the trial judge to determine. We cannot say that he was clearly erroneous in deciding implicitly that the modification was not a material alteration of the contract.

In determining whether the change was “material,” the Court, in Aetna, looked to the proportion of the total contract price which was affected by the oral modification. In Aetna, the proportion was $30 out of a total of $13,506. In the present case, the modification involved a $700 addition to a contract price of $89,863. While proportionately slightly higher than in Aetna, the modification was not substantial. What was changed was merely the height, length, direction, and price of the wall; the wall itself was within the contemplation of the parties to the contract and referred to therein. The damages which resulted were occasioned not by the modification in the wall but by the poor workmanship by which it was constructed. This fact was inferentially conceded by Mr. Burdette and confirmed by a Mr. Mills who was qualified to testify as an expert witness in masonry contracting and construction.

Judge Mathias properly assessed damages for the collapse of the wall.

III.

“Was the chancellor ... [wrong in] awarding cost-of-completion damages to owners in excess of the contract ‘allowance’ where builder of a residential dwelling fails fully to perform the construction contract? ”

Appellant’s challenge to the damages awarded is based on “two (2) propositions: (1) that the contract plans and specifications do not specifically locate the driveway; and (2) that the appellant-builder has been charged $3,667.21 for an item with a contract allowance of $1,000.” We will address these two challenges in the order presented.

Appellant’s first contention “that the contract plans and specifications do not specifically locate the driveway” is not properly before us. Although the issue of the driveway was raised below, the question of the location of the driveway was not decided by the trial judge and, therefore, cannot be raised on appeal. Md. Rule 1085.

As to the second proposition, the amount of damages assessed, we also find no reversible error. The figure of $3,667.21 presented by appellants is misleading in that $773.10 of that sum has already been accounted for in relation to the collapsed wall. By subtracting the $773.10 from the $3,667.21, the award is more accurately assessed as being $2,894.11. Admittedly, the cost is almost three times the $1,000 “allowance” called for in the contract.

The trial judge received testimony as to the cost and reasonableness of the amount claimed for completing the “driveway and entrance.” The testimony included that of an expert witness in the field of home construction and home inspection. He testified as to the requirements for the driveway and entrance as set forth in the plans and specifications and the construction contract itself. Based on the evidence presented, Judge Mathias concluded that “[i]n order to get what they had contracted for, the LaScolas were put to considerable additional expenses and are entitled to damages itemized as follows [in pertinent part]:

Yard
Driveway grading and county apron $ 635.00
Cement chunks 15.00
Blacktop repair 500.00
Drain tile 175.00
Lost seed and fertilizer 25.00
Lost stone 223.10
Labor Performed by Family ($5.00per hour)
Driveway work 1,096.25
$10,090.62”

There is ample evidence in the record to support the factual conclusions of the trial judge. We cannot say he was clearly erroneous. Md. Rule 1086.

IV.

“Was the chancellor ... [correct in] awarding to owners against the builder, the sum of $8,585.00 as ‘reasonable attorney fees’ and $1,535.00 for expert witness fees authorized under the terms of the construction contract, where the cost-of-completion damages were $10,090.00? ”

“The general rule is that, other than usual and ordinary court costs, the expenses of litigation — including legal fees incurred by the successful party — are not recoverable in an action for damages.” (Citations omitted.) Empire Realty Co. v. Fleisher, 269 Md. 278, 285-86, 305 A. 2d 144, 148 (1973). An exception to that rule sanctions the award of attorney’s fees under special circumstances, “as where the parties to a contract agree on the payment of attorney’s fees.” Webster v. People’s Loan, Savings & Deposit Bank, 160 Md. 57, 152 A. 815 (1931).

The construction contract, in the instant case, provided:

“8. Should any dispute arise between the parties, owner or builder, respecting the true construction of the drawings or specification, or respecting the manner or sufficiency to the performance of the work, or should any dispute arise between the parties hereto respecting the valuation of extra work, work done or work omitted, the disputed matter shall be referred to and decided by two competent persons who are experts in the business of building, one to be selected by the owner and the other by the builder; and in case they cannot agree, these two shall elect a third arbitrator, and the decision of any two of them shall be binding on all parties. Provided, however, that the work shall not be interrupted or delayed pending such decision. Should either party hereto bring suit in court to enforce the terms hereof, it is agreed that the losing party shall pay to the successful party his costs and reasonable attorney’s fees.” (Emphasis supplied.)

We interpret paragraph 8 of the contract as providing for the award of attorney’s fees only in respect to enforcement, in court, of the arbitration. The underlined sentence refers to the “terms hereof,” i.e., the provisions of that paragraph which only relate to the agreement to arbitrate. Inasmuch as arbitration was not undertaken, that contract provision does not apply.

Similarly, there is no basis for the award of expert witness fees. Such fees ordinarily are not recoverable from the unsuccessful party, Freedman v. Seidler, 233 Md. 39, 47, 194 A. 2d 778, 783 (1963), and there is nothing in the present case that justifies a departure from the ordinary.

V.

In view of our decision with respect to the fourth question, we shall not discuss the fifth question raised by appellants, as it is no more than the fourth, revisited and rehashed.

Appellees, pursuant to Md. Rule 1036, have moved to dismiss the appeal on the ground that appellants have failed to comply with Md. Rule 1028. While the appellants’ record extract is deficient, that deficiency has been corrected by the appellees’ printing of an appendix in which the material missing from appellants’ extract is supplied. Kemp-Pontiac-Cadillac, Inc. v. S. & M. Construction Co., 33 Md. App. 516, 365 A. 2d 1021 (1976). We, therefore, deny the motion to dismiss.

Motion to dismiss denied.

Judgment affirmed in part and reversed in part.

Costs to be paid by appellants.

      . Jules Backman, Surety Rate-Making: A Study of the Economics of Suretyship 1, (The Surety Association of America, 1948).

      . Genesis 43:9, 44:32; Proverbs 6:1, 11:15, 17:18, 20:16.

      . J. Backman, Surety Rate-Making: A Study of the Economics of Suretyship, supra, note 1.

      . Id. See also W.D. Morgan, “The History and Economics of Surety-ship,” Cornel] Law Quarterly, Vol. 12, pp 153-171 (1927).

      . J. Backman, Surety Rate-Making, supra note 1.

      . Id. at 2.

      . Id. at 3.

      . The record indicates that Peoples Lumber and Supply Company was a sole proprietorship on May 31, 1973, when the completion bona was executed and that Peoples became incorporated on July 2, 1975.

      . This is so because they did receive $40,000 on the builder’s account and, inferentially, would reap a profit by furnishing supplies to the builder in the instant case.

      . The appellants and the appellee agree that the bond is unambiguous. .We have a different view, and despite what they agree to, there was a great deal of argument over what the bond language meant.

      . As a result of the collapsed wall, the LaScolas claimed damages for blacktop repair, lost seed, lost fertilizer and lost stone. These items and the amount allotted for each are set forth in the trial court opinion under the heading “yard.”

      . Additionally, appellant-surety “further alleges if it is not liable for the collapse of the retaining wall, then its liability for the driveway should not properly exceed the ‘allowance.’ ” (Emphasis supplied.) Since this question is contingent on the surety’s liability for the retaining wall, and inasmuch as we have held that appellant-surety is liable for the damages resulting from the collapse of the retaining wall, there is no need for us to address the second part of the third question.

      . This figure includes $500 for blacktop repair and $223.10 for lost stone.


text:
    PHILLIP PAUL WEINER v. THE MARYLAND BOARD OF PHARMACY et al.
    [No. 272,
    September Term, 1978.]

      Decided December 7, 1978.

    The cause was argued before Gilbert, C. J., and Moore and Lowe, JJ.

      Glenn É. Bushel, with whom was Joseph S. Kaufman on the brief, for appellant.

      Jack C. Tranter, Assistant Attorney General, with whom was Francis Bill Burch, Attorney General, on the brief, for appellees.
   Gilbert, C. J.,

delivered the opinion of the Court.

The Legislature, in Laws 1975, ch. 464, now codified as Md. Ann. Code art. 43, § 271 A, mandated that the Maryland Board of Pharmacy promulgate a “current prescription price list of the 100 most commonly prescribed drugs, excluding controlled dangerous substances.” Section 271A (c). The list is required to “be displayed prominently in the immediate vicinity of the prescription drug service area ... [so] as to be easily visible to customers without having to obtain permission or assistance of an employee of the establishment ----” Section 271A (d).

Wilful failure to post the list constitutes a violation of the law and “is subject to a fine of not more than $100 for each violation.” Section 271A (h).

The appellant, Phillip Paul Weiner, a licensed pharmacist operating Weiner’s Pharmacy at 3635 Old Court Road, Baltimore County, Maryland, refused to comply with the posting requirement, and he was charged in the District Court of Maryland for Baltimore County for failing to post the prescription drug price poster. At the hearing before Judge J. William Hinkel, Weiner appeared pro se and argued that the act was unconstitutional as it required him to advertise. The matter was taken under advisement by Judge Hinkel who, on June 25, 1976, rendered an oral opinion in which he held Md. Ann. Code art. 43, § 271A to be unconstitutional and “therefore acquitted Phillip Paul Weiner of the ... charges.”

The purpose behind this litigation is to achieve an appellate decision upon the constitutionality vel non of Article 43, § 271A. If the act were declared to be constitutional, other pharmacists in situations similar to Mr. Weiner’s would be brought into line upon that happening, and further constitutional attacks would be discouraged if not wholly discontinued.

Notwithstanding Judge Hinkel's finding Weiner not guilty, the appellant alleged in his Bill of Complaint for Declaratory Relief and Injunctive Relief, and the appellees admitted, that “the Board of Pharmacy ... [had] notified ... Phillip Paul Weiner, and others, that it still... [intended] ... to enforce said law and regulations and ... [would] prosecute ... [Weiner] if he ... [did] not comply with the provisions thereof.”

Weiner avers that:

“Desiring to settle the matter, and believing that the statute violated his constitutional rights, but unable to bear the expense of litigation, ... [Weiner] authorized his attorney to inquire whether the Attorney General’s office, Consumer Protection Division, would be willing to finance an adversary proceeding to test the law. The Consumer Protection Division believed that the issue was of sufficient public importance, affected Maryland customers, and agreed to such course of action.”

Appellant’s counsel then filed a “Bill of Complaint for Declaratory Relief and Injunctive Relief.” He prayed that the circuit court “declare Article 43, § 271A (ch. 464 of the Laws of 1975) to be unconstitutional as it violates ... [Weiner’s], as well as others’, rights secured under the 14th Amendment of the U.S. Constitution.” The Bill also asked that the Pharmaceutical Board be enjoined from enforcing the provisions of Md. Ann. Code art. 43, § 271 A.

The matter was heard before Judge Walter R. Haile on June 24,1977. The judge held the case sub curia until March 7, 1978, at which time he declared the statute to be constitutional, thereby denying the relief sought by Weiner.

Subsequent to the decree, the Assistant Attorney General, under date of March 27, 1978, called Judge Haile’s attention to Reyes v. Prince George's County, 281 Md. 279, 380 A. 2d 12 (1977). The Attorney General’s letter advised Judge Haile that:

“In the instant case, Joseph S. Kaufman, Esquire, was retained by our office to institute this action on behalf of the Petitioner. Our desire in having the issues raised by this case adjudicated resulted from a criminal action brought against Petitioner in which a Maryland District Court held that the pharmacy price posting law (Article 43, Section 271 A) was unconstitutional. Because the State could not appeal that decision and because of the impact of that decision of the Board of Pharmacy’s ability to enforce the price posting law, it was necessary that the constitutionality of this statute be determined by a higher court. Hence, Mr. Kaufman was retained to represent the Petitioner in the instant case.”

Judge Haile responded on the 30th day of March that he had received the letter and “handed it to the clerk to file in the Court file.” The appeal was noted to this Court the very next day, March 31, 1978.

Although the case sub judice presents interesting questions of the constitutional rights of the individual vis-á-vis the rights of society generally, we do not believe we are at liberty to decide them because of Reyes.

The Court of Appeals, speaking through Judge Digges in Reyes, said: “[W]ith this case [we] establish new procedures under which actions of a narrowly defined class may be adjudicated despite their collusive characteristics....” 281 Md. at 287, 380 A. 2d at 16. The Court delineated “precise rubrics” governing those situations when it is advisable to entertain declaratory actions notwithstanding the fact that one party is paying the fees and expenses of both sides of the controversy, saying:

“A declaratory judgment suit having as a proper party a governmental body, or an agency or official thereof, and otherwise cognizable under sections 3-401 to -415 of the Courts Article, which action involves the validity of a statute or governmental regulation having the force of statute, or an urgently needed determination affecting future governmental conduct, and in which the public’s concern is both imperative and manifest, need not hereafter necessarily be dismissed as collusive by a court of this State if there is strict adherence to the following procedures: (1) that the court is informed by the party actually initiating, promoting or financing the litigation, at the time of the filing of that party’s initial pleading, that the opposing party, though having standing to maintain the suit, nonetheless appears in a manner which may render the action collusive; (2) that the party actually desiring the requested adjudication bind itself, in such manner as may be prescribed by the court, to pay at the court’s direction such fees and other expenses of counsel appointed in the manner provided next below; and (3) that the court name counsel, without recommendation or suggestion by any party to the action, to present in the same manner and to the same extent as though representing a truly adverse party, a position in opposition to that taken by the party who initiated and for whose benefit the action was instituted----” (Footnote omitted.) (Emphasis supplied.) 281 Md. at 299-300, 380 A. 2d at 24.

Appellant asserts that Reyes does not apply to him because it has no retroactive or retrospective qualities. We believe Reyes does apply because it was decided on October 31,1977, a period of four (4) months and one (1) week before Judge Haile handed down his decree on March 7,1978. In the Reyes opinion, it is stated that the criteria are applicable to “the adjudication of collusive suits arising hereafter____ Obviously, however,... [the appellee in Reyes] could not have complied with ... [the new] procedures.... Nonetheless, no effort was made to affirmatively conceal the true facts, and the safeguards against insufficient adverseness we have just enunciated for future cases have in this case been effectuated through this Court’s own actions----” 281 Md. at 301, 380 A. 2d at 24.

We interpret Reyes as applying to all similar cases that had not reached the judgment stage. Unlike the facts in Reyes where the parties could take no action to comply with the Reyes criteria because they had not even been announced, the litigants in the case sub judice were afforded ample time (four months and one week) from the date of the Reyes decision until the decree of March 7,1978, to meet its requirements.

The parties hereto did file, in this Court, a “Disclosure of Fee Arrangement Under Reyes v. Prince George’s County” which they suggest complied with the Reyes holding. We, however, have a different view. We believe the Court of Appeals meant that the trial court was to be notified of the true nature and purpose of the suit. If that is done, the appellate court, by virtue of the record, will gain that knowledge should the matter be appealed. We think the Court did not intend to allow litigants to avoid Reyes compliance at the trial level and then satisfy it at the appellate stage. That type of procedure might well lead to a pattern of disclosure at the appellate level only, or for that matter, only at the highest level of our appellate structure.

We have no doubt that the presentation made by Weiner’s attorney is as vigorous as anyone could expect from the strongest of adversaries. Nevertheless, the method employed by the State in bringing this litigation gives rise to the appearance of impropriety in the form of collusion. As Reyes points out, “selection of counsel and payment of his fees by an opposing party is always equivalent to dominating the conduct of the litigation.” 281 Md. at 285, 380 A. 2d at 16. While counsel for Weiner was chosen by Weiner, and counsel in turn approached the State which agreed to pay that attorney, the distinction does not cure the appearance of collusion. The Reyes prerequisites were carefully and thoughtfully designed to avoid that very appearance of impropriety. That is one of the reasons counsel should be selected by the court.

As interesting as the merits of Weiner’s case may be, we believe we are precluded by Reyes from reaching them, and we so hold.

Because we hold Reyes to be applicable to the matter before us and because it was viable at the time the judge handed down his decree, it was binding upon him.

We shall, therefore, invoke our power under Md. Rule 1071 and remand the matter without affirmánce or reversal for reconsideration by the trial judge in the light of Reyes.

Case remanded without affirmance or reversal for reconsideration in accordance with this opinion.

Costs to be paid by appellees.

      1. The Assistant Attorney General’s letter to Judge Haile on March 27, 1978, contained in the record before us in this appeal, expresses a somewhat different set of facts. It states that appellant’s attorney “was retained by our office to institute this action on behalf of the petitioner” and that “he was chosen and his services paid for by this office.”
      While the two statements of fact seem at first glance to be in conflict, they are not. In actuality, Weiner’s counsel, though initially chosen by Weiner, was also chosen and approved by the Attorney General to represent Weiner at the expense of the State.

      . We attach no blame to Mr. Kaufman for the failure to notify Judge Haile. It is clear from Reyes that the “party ... promoting or financing the litigation” should be the one to apprise the judge of the true nature of the case. In the matter sub judice that onus fell on the Attorney General’s office.


author: Wilner, J.,

text:
    MARYLAND INDEPENDENT AUTOMOBILE DEALERS ASSOCIATION, INC. et al. v. ADMINISTRATOR, MOTOR VEHICLE ADMINISTRATION
    [No. 356,
    September Term, 1978.]

      Decided December 7, 1978.

      The cause was argued before Lowe, Wilner and MacDaniel, JJ.

      William L: Putzel and Ronald J. Kearns, with whom were Putzel, Putzel & Danoff, P.A. on the brief, for appellants.

      Joanna S. LeHane, Assistant Attorney General, with whom was Francis Bill Burch, Attorney General, on the brief, for appellee.
   Wilner, J.,

delivered the opinion of the Court.

Commercial Law article, § 2-316 describes various ways in which a seller of goods may limit or negate implied warranties that otherwise might be applicable to the sale. Section 2-316.1, however, which immediately follows § 2-316, states that the provisions of § 2-316 “do not apply to sales of consumer goods, as defined by § 9-109.” Section 9-109 defines as “consumer goods” those that are “used or bought for use primarily for personal, family or household purposes.” No one contests that automobiles, whether new or used, that are bought primarily for personal, family, or household use are “consumer goods” as so defined. See Houck v. DeBonis, 38 Md. App. 85 (1977), footnote 2 at 87.

Having excluded sales of consumer goods from the provisions of § 2-316, § 2-316.1 goes on to state in its next succeeding paragraph (hereafter referred to as § 2-316.1 (2)):

“Any oral or written language used by a seller of consumer goods and services, which attempts to exclude or modify any implied warranties of merchantability and fitness for a particular purpose or to exclude or modify the consumer’s remedies for breach of those warranties, is unenforceable. However, the seller may recover from, the manufacturer any damages resulting from breach of the implied warranty of merchantability or fitness for a particular purpose.”

The Motor Vehicle Administration (MVA), a unit within the State Department of Transportation, is the agency that licenses, and to a degree, regulates, automobile dealers and salesmen. See Transportation article, title 15, subtitles 3 and 4. With more particular reference to this case, § 15-312 provides that a dealer may not willfully fail to comply with the terms of a warranty or guarantee; § 15-315 authorizes MVA to suspend, revoke, or refuse to renew the license of any dealer who fails to comply with any provision of the Maryland Vehicle Law relating to the sale of vehicles, which would include § 15-312; and § 12-104 (b), dealing with the general powers of MVA, authorizes it to adopt rules and regulations to carry out those provisions of the Maryland Vehicle Law “that relate to or are administered and enforced by [MVA]”.

Presumably in furtherance of this regulatory and rule-making authority, and with tacit, but nonetheless apparent, reference to Commercial Law article, § 2-316.1, MVA, on May 16,1976, adopted Regulation 11.02.03.83, which provides:

“A warranty may not contain language which specifically disclaims any implied warranty of merchantability or fitness. Examples of prohibited disclaimers are as follow.
“A. ‘This warranty is expressly in lieu of any other warranty, express or implied, including any implied warranty of merchantability or fitness for a particular purpose, and any other obligations or liabilities on the seller’s part,’ or similar language that could be construed by a consumer to limit his recourse to the terms of express warranties.
“B. ‘This vehicle is being sold as is, without any implied or express warranty of merchantability,’ or similar language.
“C. ‘Sold used with 50-50 warranty. The dealer hereby guarantees this vehicle for_ days after_19 _with the understanding that necessary repairs made within this period of time will be charged half to the buyer and half to the dealer, of total retail cost of parts and labor used,’ or similar language.”

The Maryland Independent Automobile Dealers Association, appellant, sued MVA and its administrator initially seeking a declaratory judgment that § 2-316.1 does not apply to the sale of used cars, and that its member dealers therefore have a right to sell used cars on either an express warranty or an “as is” basis. Following the sustaining of a demurrer to this complaint, appellant filed an amended complaint seeking essentially the same relief, but through a challenge to the MVA regulation. The specific relief requested was a judgment declaring that § 2-316.1 (2) does not apply to “used motor vehicles”, and that the complainants are “thereby not required to comply with the terms thereof”, and an injunction restraining MVA and its administrator “from exercising any of the powers respecting the enforcement of the implied warranty provisions of [§ 2-316.1 (2)] against the Complainants.” This appeal is from the denial of that relief by the Circuit Court for Baltimore County.

Although the parties differ in their statement of the questions presented, it appears that there are but two issues to be decided: (1) does § 2-316.1 (2) apply to the sale of used automobiles which otherwise fall within the definition of “consumer goods”, and (2) if so, may MVA enforce that section in the manner reflected by its regulation 1L02.03.83?

(1) Statutory Interpretation

There is nothing within § 2-316.1 (2) itself that facially would restrict its application to the sale of “new” goods, or, conversely, that would exclude from its provisions the sale of “used” goods. Appellant seeks to read that restriction, or exclusion, into the law by interpreting the second sentence in paragraph (2) — “However, the seller may ...” — as a condition precedent to the first sentence in that paragraph. In other words, its position seems to be that the restrictions contained in the first sentence apply only if the seller has an actual remedy under the second sentence, and, therefore, language which modifies or excludes an implied warranty is only unenforceable if the seller is able to recover from the manufacturer damages resulting from breach of an implied warranty. From this rather tenuous base, it argues that, with respect at least to used cars that, for one reason or another, are no longer subject to manufacturer’s warranties at the time of the resale, the dealer, or seller, cannot avail himself of this condition, and, for that reason, the requirement itself does not apply.

As § 2-316.1 (2) is now written, there is no basis whatever for the interpretation suggested by appellant. The two sentences comprising that paragraph express complete, unambiguous, and independent thoughts, neither being conditioned upon the other. The first sentence concerns the relationship between the seller and buyer of consumer goods, and makes absolutely clear, without condition or equivocation, that any attempt by the seller in such a transaction to modify or exclude implied warranties is unenforceable. As between seller and buyer, there are no “ifs, ands, or buts.” What the second sentence, which was added to the original bill by amendment, does, and was obviously intended to do, is to allow the seller, who might otherwise have no standing in the matter, to recover from the manufacturer if indeed there has been a breach of any of its (the manufacturer’s) implied warranties. There is no justification in the plain wording of the statute, in the wording of the predecessor statute, or in the legislative history of the statute for the proposition that the protection afforded to consumers by the first sentence is in any way subject to abrogation based upon whether the seller may or may not have a cause of action against the manufacturer on its implied warranties.

Thus, the attack by appellant upon the statute itself is unfounded. Paragraph (2) clearly applies to the sale of all “consumer goods”, new or used, without regard to whether the seller, in any given case, has a viable action against the manufacturer. See Mangieri v. Admiral Pontiac, Inc., Circ. Ct., Anne Arundel Co., 14 U.C.C.R.S. 82 (1974). Also Testo v. Russ Dunmire Oldsmobile, Inc., 554 P. 2d 349 (Wash. App., 1976); Moore v. Burt Chevrolet, Inc., 563 P. 2d 369 (Col. App., 1977) and cases cited therein.

(2) Validity of MVA Regulation

Appellant’s contention here is that, even if, under § 2-316.1 (2), disclaimers are “unenforceable”, there is no warrant for MVA to “enforce” that provision. We find that argument equally lacking in merit. As noted, MVA is specifically authorized to adopt regulations to carry out the provisions of the Vehicle Law that relate to or are administered or enforced by it. One of these, in the subtitle dealing with the licensing of dealers, prohibits dealers from willfully failing to comply with a warranty. Transportation article, § 15-312 (7). A disclaimer made in violation of § 2-316.1 (2) may well constitute such a failure, thereby subjecting the dealer to disciplinary action by MVA.

If a dealer were charged with a violation of § 15-312 (7), MVA would be authorized to investigate the charge and, if it found against the dealer, to suspend or revoke the dealer’s license. Transportation article, § 15-315. Obviously, such a procedure involves the “enforcement” of Commercial Law article, § 2-316.1, but in a negative or punitive way. That being plainly authorized (and, indeed, unchallenged by appellant) we fail to see how or why MVA would not also have the authority to adopt an affirmative regulation making clear its intention to .enforce that provision, and, at the same, time, making clear what types of conduct it will consider to be in contravention of the statute.

Order denying declaratory relief affirmed; appellants to pay the costs.

      . The term “Maryland Vehicle Law”, though not statutorily defined, is intended to refer to titles 11-27 of the Transportation article, being those titles formerly comprising art. 66% of the Code. See Revisor’s Note to § 11-101.

      . This regulation has not yet appeared in COMAR. See, however, Md. Register, March 17, 1976, p. 365; May 12, 1976, p. 530; Md. Agency Rules ana Regulations, § 11.02.03.83.

      . Appellant points to the fact that, as originally enacted as § 2-316A of art. 95B by Laws of Md., 1971, ch. 505, what is now paragraph (2) of § 2-316.1 contained but one sentence. It stated: “Any language, oral or written, used by a seller of consumer goods and services, which attempts to exclude or modify any implied warranties of merchantability and fitness for a particular purpose or to exclude or modify the consumer’s remedies for breach of those warranties, shall be unenforceable, provided however, that the seller may recover from the manufacturer any damages resulting from breach of the abovedescribed warranty.” (Emphasis supplied.) Appellant seeks to construe the connective “provided however”^ as the conditioning element. Such a construction is not only unjustified by the language itself; it would seem to contravene the intent and purpose of the bill, as expressed in its title.

      . Parenthetically, we note that, even if appellant’s construction were correct — that the first sentence is conditioned upon the second — that would still not justify the relief sought. The requirements of the first sentence, even under that interpretation, would continue to apply where the vehicle sold remained subject to the manufacturer’s implied warranties.