author: Couch, J.,

text:
    COLUMBIA REAL ESTATE TITLE INSURANCE COMPANY et al. v. GRACE CARUSO et al.
    [No. 972,
    September Term, 1977.]

      Decided April 14, 1978.

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

      Michael A. Schuchat for appellants.

      Alfred G. Graf, with whom was Karl M. Dollak on the brief, for appellee Grace Caruso. William Bogen for other appellee.
   Couch, J.,

delivered the opinion of the Court.

Appellants, Columbia Real Estate Title Insurance Company and National Permanent Federal Savings and Loan Association, filed an action in the Circuit Court for Montgomery County against Grace Caruso and Mary Hollander, appellees, in which they asked the court to vacate a confessed judgment previously entered in favor of Caruso against Hollander, to enjoin the enforcement of the confessed judgment, and for certain damages. The basis for such relief, as alleged by appellants, was a conspiracy between appellees to defraud appellants of their interest in certain property located at 2815 Brandywine Street, Washington, D. C. Appellees demurred to appellants’ third amended bill of complaint, and the trial court (Shearin, J.) sustained the demurrer without leave to amend.

Appellants appealed to this Court, presenting two questions:

“1. Whether the Complaint states a claim upon which relief can be granted which alleges that defendants collusively entered into a plan of action and conspiracy to defraud plaintiffs by the entry of a confess [sic] judgment for defendant 1 against defendant 2, where defendant 2 did not owe defendant 1 the money and where it was agreed that the judgment would not be used against property of defendant 2 but only against property formerly owned by defendant 2 to defeat the prior rights of plaintiffs in the property.
“2. Whether appellants should have been granted leave to amend if the complaint was inartfully drawn by stating what were deemed legal conclusions rather than specific factual allegations.”

In reviewing the propriety of the lower court’s action in sustaining a demurrer, we must keep two rules steadfastly in mind. First, a demurrer may not introduce and rely upon facts not already in the record. Beach v. Mueller, 32 Md. App. 219, 359 A. 2d 232 (1976). Second, and most importantly, we must assume the truth of all well-pleaded facts in the bill of complaint, as well as inferences which may be reasonably drawn from those well-pleaded facts. Hall v. Barlow Corp., 255 Md. 28, 42, 255 A. 2d 873, 880 (1969).

Appellants’ bill of complaint, eliminating all conclusions and facts not well-pleaded, essentially alleges the following:

1. Hollander owned a piece of real estate at 2815 Brandywine Street, N. W., Washington, D. C., and conveyed it, in 1970, to her husband’s nominee;

2. In 1973 National Permanent made a loan to some person, unidentified in the record, and this loan was secured by a first deed of trust on the 2815 Brandywine Street property. The deed of trust was duly recorded in the District of Columbia.

3. Columbia insured the validity of the title of National Permanent.

4. Caruso sued Hollander in the Circuit Court for Montgomery County on a confessed judgment note in 1975.

5. Hollander immediately confessed judgment in that action.

6. Hollander, at this time, was not a resident of Maryland.

7. Hollander and Caruso agreed that Caruso would enforce the confessed judgment only against the 2815 Brandywine Street property, previously owned by Hollander.

8. Pursuant to this agreement, Caruso and Hollander agreed that Caruso would bring an action in the District of Columbia to have the 1970 conveyance by Hollander set aside, enabling Caruso to obtain a lien on the property with first priority.

9. Caruso filed the action to set aside the conveyance, which is being defended by Columbia in compliance with the terms of its contract with National Permanent.

10. Columbia is suffering some damage by having to defend the suit brought by Caruso in the District of Columbia.

11. If the District of Columbia suit succeeds, there may be damages to both appellants in the future.

Assuming these facts to be true, the question for our consideration is whether they form the basis for a cause of action on which relief may be granted. We do not believe that they do, and will affirm the court below.

This case presents the factual situation of a person, not a party to an action at law, attempting to have the judgment in that action set aside. The non-party is not attempting to intervene in that action, but has filed a separate bill in equity to set aside, and enjoin enforcement, of that judgment. Restatement of Judgments, § 112, provides:

“Equitable relief from a judgment may be given by means of a proceeding brought to obtain such relief____”

There is authority in Maryland that such a suit may be brought in equity to set aside a judgment at law by a party to the judgment. Gotham Hotels, Ltd. v. Owl Club, 26 Md. App. 158, 337 A. 2d 117 (1975); Schwartz v. Merchants Mortgage Co., 272 Md. 305, 322 A. 2d 544 (1974); Taylor v. Mallory, 76 Md. 1, 23 A. 1098 (1892). The Maryland cases have identified only one ground for such a suit — extrinsic fraud. Section 112 of the Restatement identifies two additional areas in which relief might be granted. The first is where the judgment is void. The second is where procedural rules or difficulties in the forum court prevent a party from presenting a defense to a claim against him. Restatement of Judgments, § 112, Comment b.

Restatement of Judgments, § 115, provides:

“(1) Any person whose interests have been adversely affected by a judgment, and only such a person, may be entitled to equitable relief.”

Section 115 makes the § 112 format, an action in equity, available to non-parties to suit, if those non-parties “have been adversely affected” by the judgment. Clearly the “adversely affected” criterion is a prerequisite in the nature of a standing requirement. If this “standing” requirement is satisfied, a suit at equity is available to set aside a judgment at law by a non-party to the judgment. See Lieberman v. Aetna Ins. Co., 249 Cal. App. 2d 515, 57 Cal. Rptr. 453 (1967); Bannock Title Co. v. Lindsey, 86 Idaho 583, 388 P. 2d 1011 (1963).

In Martin v. Jewell, 37 Md. 530 (1873), the mortgagee, Martin, sought equitable relief against judgments entered in favor of Jewell against the mortgagor, Smith. The relief sought was to set aside the judgments and enjoin the execution on the judgments, which was being asserted against the mortgaged property. The court held that Martin was not entitled to equitable relief in setting aside the judgments between Smith and Jewell, because the judgments “are entirely between Smith and Jewell, and he, the appellant, is not in any manner liable under them.” 37 Md. at 535. The court did allow Martin to seek an injunction to protect the mortgaged property from execution, on a showing of irreparable harm.

We believe Martin to be consistent with the principles enunciated in Restatement of Judgments, § 115. Section 115 allows equitable relief only where the non-party is adversely affected. Clearly in Martin the judgment standing alone, which merely ascertained the legal existence of the debt and enabled execution on any property, did not adversely affect Martin, the mortgagor. Jewell could have executed against property belonging to Smith, in which Martin had no interest. However, when execution was asserted against the mortgaged property, Martin was adversely affected and thereby entitled to seek equitable relief against the execution of that judgment.

The prototype case wherein the non-party may seek to have a judgment set aside is where the non-party is contractually liable to the defendant party for any judgment against that party. In such case, the rendition of the judgment of itself has an adverse effect on the non-party, and § 115 of the Restatement, Comment b, would allow such a non-party to . seek to have the judgment set aside. That is not the type of factual situation presented by appellants’ bill of complaint.

The case at bar presents a situation best compared to Martin, with respect to the holding of that case concerning the mere rendition of the judgment. The existence of the confessed judgment between Caruso and Hollander has of itself no adverse effect on the property rights of appellants. As alleged by appellants, National Permanent’s deed of trust interest in the subject property stands or falls on the suit filed in the District of Columbia to rescind the conveyance of the property from Hollander to Hollander’s vendee, who may be National Permanent’s grantor. If the outcome of that suit is unfavorable to Columbia — rescission is decreed — then National Permanent’s loan to the unidentified person is no longer secured by a valid deed of trust on that property. Bond v. Crawford, 193 Va. 437, 69 S.E.2d 470 (1952); Harrison v. Mary Bain Estates, 2 Misc. 2d 52, 152 N.Y.S.2d 239, aff'd, 2 App. Div.2d 670, 153 N.Y.S.2d 552 (1956); Gladowski v. Felezak, 346 Pa. 660, 31 A. 2d 718 (1943). The invalidity of National Permanent’s deed of trust if rescission is decreed holds true whether Hollander holds the reacquired property free of liens or, as the appellants allege, is subject to Caruso’s judgment lien.

On the other hand, if the outcome of that suit to rescind is favorable to appellants — rescission is not decreed — title to the property remains in National Permanent (or its mortgagor) and Caruso’s judgment against Hollander cannot provide a lien against the property at all. Md. Code (1974), Courts and Judicial Proceedings Article, § 11-402; Eastern Shore Bldg. & Loan Corp. v. Bank of Somerset, 253 Md. 525, 531, 253 A. 2d 367, 371 (1969).

Clearly then, appellants have alleged no factual basis showing an adverse effect by the confessed judgment between Caruso and Hollander on appellants’ rights in the property. Therefore, taking their allegations as true, they have alleged no facts, or inferences drawable from those facts, entitling them to the equitable relief of either setting aside the confessed judgment or enjoining the use and enforcement of that judgment.

Appellants have also asserted a claim based on the facts as alleged, for damages. The basis for the damages claim is an alleged conspiracy between Caruso and Hollander to defraud appellant National Permanent of its mortgage interest in the property. The elements necessary to maintain a civil action for conspiracy were delineated by the Court of Appeals in Van Royen v. Lacey, 262 Md. 94, 277 A. 2d 13 (1971):

“It would appear to be well settled law in this State that a conspiracy, standing alone, is not actionable. In order for a civil action for conspiracy to be maintained, there must be, in addition to a confederation of two or more persons, (1) some unlawful act done in furtherance of the conspiracy, and (2) actual legal damage resulting to the victim-plaintiff.”

262 Md. at 97, 98, 277 A. 2d at 14.

“In this state it makes no difference what the conspirators’ motives may be, if their acts are not unlawful.” Miller v. Preston, 174 Md. 302, 199 A. 471 (1938). Therefore, unless appellants have alleged some unlawful act on the part of the appellees, their action for conspiracy cannot be maintained, even though the appellees have an intent to defraud the appellants.

An “unlawful act” as required to be alleged and proven to recover in a civil action for conspiracy is not necessarily a criminal act. In Van Royen, “unlawful act” was held to include a conveyance of property in defraud of creditors. Md. Code (1974), Commercial Law Article, § 15-207. As was said in Knoche v. Standard Oil Co., 138 Md. 278, 282, 113 A. 754, 755 (1921):

“The act must be of such a character as to create an actionable wrong before the right of recovery against the defendant exists, and to create an actionable wrong the legal rights of the plaintiff must in some way be invaded. There must be a violation of a legal right committed knowingly to create a cause of action.”

Goldman v. Building Ass’n., 150 Md. 677, 683, 133 A. 843 (1926); Debnam v. Simonson, 124 Md. 354, 92 A. 782 (1914). Thereafter, in discussing the demurrer of the plaintiffs in Knoche in terms of a conspiracy to defraud, the court found:

“While the words fraud and fraudulent are used in the declaration, there are no facts alleged which would constitute an action for fraud or deceit.”

138 Md. at 283, 113 A. at 756.

Apparently then, “unlawful act” connotes a tort, or breach of contract, or other actionable wrong. An action for fraud or deceit requires averment and proof of five elements: 1) a false representation to the plaintiff, 2) that the falsity of the representation be either known to the defendant or be made in reckless disregard of the truth, 3) that the representation be made with the intent of defrauding the plaintiff, 4) that the plaintiff had a right to rely on the representation and did rely, and 5) that the plaintiff was damaged. Appel v. Hupfield, 198 Md. 374, 84 A. 2d 94, 95-6 (1951).

Appellants have alleged no false representation made to them by appellees. Therefore, they have failed to allege an actionable wrong in respect to fraud.

In Bachrach v. United Cooperative, 181 Md. 315, 29 A. 2d 822 (1943), the Court of Appeals defined “fraud,” as the term is used in equity, to:

“... includefs] all acts, omissions and concealments which involve a breach of legal or equitable duty, trust or confidence justly reposed. ...”

181 Md. at 322, 29 A. 2d at 826. While this definition is broader than the definition as used at law, appellants have failed to allege a “legal or equitable duty, trust or confidence justly reposed” owed to them. Appellants do not allege in their complaint a duty or breach of duty on the part of appellees with respect to appellants.

Accordingly, appellants failed to allege sufficient facts to state a cause of action on which relief could be granted, and the demurrer was properly sustained.

Appellants’ last contention is that they should have been granted leave to file a fourth amended bill of complaint. The answer to this contention is that we cannot find in the record any request by appellants that they be granted such relief. Admittedly, the trial court stated that it felt appellants would not be able to successfully amend the complaint and, on that basis, sustained the demurrer without leave to amend. We recognize that leave to amend shall be freely granted in order to promote justice, but there must also be an end to litigation. See Earl v. Anchor Pontiac, 246 Md. 653, 229 A. 2d 412 (1967). We do not feel there are special circumstances involved here that, to promote justice, require us to remand to allow appellants to file another amended bill of complaint.

Judgment affirmed.

Appellants to pay costs.

      . That is, the definition as formulated in Appel v. Hupfield, supra, which gives rise to an action for deceit. “An intentional perversion of truth for the purpose of inducing another in reliance upon it to part with some valuable thing...Black’s Law Dictionary (4th Ed.)

      . Because we find no “unlawful act”, we need not consider whether the costs of having to defend the District of Columbia law suit would constitute damages withm the meaning of Van Royen.


source: Caselaw Access Project

author:
Couch, J.,
      Lowe, J.,

license: Public Domain

text:
    EUGENE HUGH MATHIAS v. STATE OF MARYLAND
    [No. 860,
    September Term, 1977.]

      Decided April 17, 1978.

    The cause was argued before Thompson, Lowe and Couch, JJ.

      Claude L. Callegary for appellant.

      Michael A. Anselmi, Assistant Attorney General, with whom were Francis B. Burch, Attorney General, Edwin H. W Harlan, Jr., State's Attorney for Harford County, and Peter C. Cobb, Assistant State’s Attorney for Harford County, on the brief, for appellee.
   Couch, J.,

delivered the opinion of the Court. Lowe, J., dissents and filed a dissenting opinion at page 294 infra.

Following a court trial in the Circuit Court for Harford County (Higinbothom, J.), appellant, Eugene Hugh Mathias, was found guilty of distribution of a controlled dangerous substance and conspiracy to distribute a controlled dangerous substance; he was sentenced to four years incarceration on the former and three years concurrent on the latter. From these convictions he appeals, claiming the trial court erred in refusing to allow him to withdraw his previous waiver of a jury trial and forcing him to be tried by the court.

Appellant and a co-defendant were indicted on four counts of violating the Controlled Dangerous Substance laws of the State. Appellant was arraigned on October 5, 1976, at which time he pled not guilty and elected a court trial (he does not contend here that his waiver of a jury trial was anything but voluntary and intelligent). The court trial was set for June 9, 1977, but was postponed, at appellant’s request, until June 29, 1977. On the morning of trial appellant, through his attorney, sought leave to change his trial election and to be tried by a jury. At the hearing on the motion it developed that early the previous week the State’s Attorney’s office notified appellant’s attorney that the co-defendant was pleading (apparently guilty) to two counts of the indictment. It was further stated that it was not until the morning of trial that appellant’s attorney talked to the attorney for the co-defendant and learned that the co-defendant was going to testify for the State and how deeply prejudicial this testimony was. The State opposed appellant’s motion on the ground that no jury was available, that trial would have to be delayed from six to eight weeks, and that the State had brought a former police witness in from Pittsburgh (and thus already incurred certain expenses). We note that, at the motion hearing, appellant’s counsel stated that perhaps they could stipulate to what the out-of-state witness’s testimony would be. The court felt that appellant had not shown good cause, that there would be inconvenience to the out-of-state witness and expense to the State, and, consequently, denied appellant’s request. The ensuing trial resulted in appellant’s conviction.

It goes without saying that one charged with a criminal offense may elect to be tried by a jury. Maryland Declaration of Rights, Article 5; Sixth Amendment to the United States Constitution. It is also true that a defendant, in a criminal case, may waive his right to a jury trial. State v. Zimmerman, 261 Md. 11, 273 A. 2d 156 (1971). Further, it is clear that a defendant’s election to be tried by the court may be withdrawn. Maryland Rules of Procedure 741 (now 735) provides in part, “The court may, in its discretion and for good cause shown, at any time prior to the trial permit the accused to change his election.” Thus our review here is limited to a determination of whether the trial judge abused his discretion in denying appellant’s request for a jury trial, made on the morning of trial, which trial had been scheduled for some eight months.

Chief Judge Murphy, speaking for the Court of Appeals in State v. Jones, 270 Md. 388, 395, 396, 312 A. 2d 281 (1973), stated:

“For purposes of determining whether ‘good cause’ under Rule 741 has been shown to permit the requested change in election, the trial judge should consider, among other things, the reason expressed for making the request, when the request is made in relation to the time of trial, the lapse of time between the election and the requested change, whether there has been a change of counsel, whether the motion is made in good faith and not to obtain delay, whether the granting of the motion would unreasonably delay trial, impede the cause of justice or the orderly administration of the courts, prejudice the State’s case, or unreasonably inconvenience witnesses. Within this framework, the trial judge is vested with wide discretion in deciding whether to permit the requested change in election.”

Applying these standards to the instant case, we are not persuaded that the trial court abused its discretion in denying appellant’s request. Certainly there was inconvenience to the State and to the out-of-state witness, there had been a week’s notice of the change of position of the co-defendant, there was interruption of the orderly administration of the court, and no prejudice to appellant was shown. We note, in this latter respect, that the trial judge stated:

“The court is not going to determine a case on whether or not the co-defendant pleaded guilty. The court is going to determine the case on evidence as it’s presented to it and argument by counsel as to the law so I can’t see first why or in what manner Mr. Mathias can be prejudiced by that fact.”

Judgments affirmed.

Appellant to pay costs.

Lowe, J.,

dissenting:

State v. Jones, 270 Md. 388, relied upon by the majority, turned upon facts clearly indicating that Jones had manipulated the system for purposes of delay. He had originally exercised his right to a jury trial but being unhappy with the jury selected, had, on the day of trial, waived the jury for a court trial, then obtained an immediate postponement followed by another subsequently granted. When again he came to trial, he chose that moment to fire his court appointed counsel on grounds relating to the attorney’s selection of the original jury rejected two months previously. Following several delays encompassing over seven months thereafter, Jones was finally called to trial with his new attorney, and at this juncture asked for a jury trial and to withdraw his former waiver.

The Court of Appeals, quoting out-of-State cases with approval, gave every indication that a court “should permit” application for withdrawal of a waiver when “seasonably made” if “good cause” is shown under Md. Rule 741 (now Rule 735). It was apparent there, however, that Jones neither had good cause nor had he seasonably applied.

— good cause —

Upon learning on the day of trial that his codefendant was trading his own freedom for testimony prejudicial to appellant, appellant Mathias acted precipitously to withdraw his waiver and exercise his constitutional right to have a jury of twelve of his peers weigh the suspect testimony (arguably purchased with judicial leniency by the prosecutor), rather than have such testimony weighed by a single jurist whose very role may have hardened him to the plea bargain procedure. If such a reason does not constitute “good cause” to withdraw a jury waiver, as the majority described “good cause” in its quote from State v. Jones, 270 Md. 388, 395-396, I am at a loss to determine what would fulfill the definition.

— seasonable application —

Although the week before trial appellant may have suspected that his codefendant’s guilty plea was the result of a plea bargain which would enure to appellant’s detriment, he is hardly chargeable with that knowledge, especially in light of the fact that the codefendant could not be compelled to testify until his own judgment was final. McClain v. State, 10 Md. App. 106, 114, cert. denied, 259 Md. 733. Although appellant’s counsel was notified the week previous to trial that the codefendant would plead guilty, there is no evidence that appellant, or his counsel, was advised that the codefendant would testify voluntarily against appellant. Thus, on the day appellant became aware of the underlying cause for his need for the jury, he sought it promptly. That was certainly a “seasonable” application.

— impede justice, unreasonable delay, prejudice to the State —

But seasonable application to withdraw the waiver, even coupled with good cause, may not be enough. Jones tells us that whether the motion was made “timely” depended upon whether it was made at a time when the granting thereof would result in a delay of trial, impede justice, prejudice the State, or inconvenience witnesses. Id. at 394. As pointed out by the majority, the State argued that a six to eight week delay would be required and presumably that this was unreasonable. It further contended that it was prejudiced by the expense of bringing a witness to testify from his present home in Pittsburgh and that this witness — a former police officer — would be inconvenienced by a second day’s journey.

The question is whether these are inordinate rather than expected impediments following a continuance. Is a six to eight week delay “unreasonable” where the State has shown no need for extraordinary expedition? Is justice impeded by a second State-paid carfare from Pittsburgh to Harford County? If so, it should be noted that appellant qualifiedly offered to stipulate that witness’s testimony if given his right to jury trial. This offer was presumably not considered, explored or mentioned by the trial judge when he denied the jury trial.

Too often our system is in such a hurry that its primary purpose is blurred by desire for unnecessary expedition and judicial convenience. Justice and fair play are by far more compelling considerations — certainly more so than the not unreasonable inconvenience of a single witness, or the hardly inordinate State’s expense required to bring that witness back from his present Pittsburgh home.

The Court of Appeals, in Jones, recognized that the Rule 741 discretion was not absolute, and should be liberally granted (“ ‘... the court should permit it.’ ”) and restrictively withheld:

“ ‘. the fundamental... right of trial by jury will best be protected... if the withdrawal of the waiver to such a trial is refused by a court only when it is not seasonably made in good faith, or is made to obtain a delay, or it appears that some real harm will be done to the public, i.e., the State, such as unreasonable delay or interruption of the administration of justice, real inconvenience to the court and the State, or that additional expense to the State will be occasioned thereby.’ ” (emphasis added). Jones, supra, at 394, quoting Floyd v. State, 90 So. 2d 105, 106.

Clearly in this case application to withdraw was made as soon as the cause was manifest, despite it having been a “last minute motion”. If Jones is interpreted to permit denial of all withdrawal applications made on the date of trial, regardless of good cause or seasonableness vis-a-vis the knowledge of that cause, the remaining high-sounding intonations of justice, couched in obligatory verbs and adjectival imperatives, is reduced to a mouthing of platitudes. Jones obviously means more than that.

Finally, in regard to the “prejudice” to appellant, the majority points out that the trial judge assured appellant that he would decide the case solely on the law and the evidence, and not determine his guilt on “whether or not the co-defendant pleaded guilty.” Despite our self-serving assurances to the public from time to time that judges are superior beings with a “multitude of admirable qualities” and thus not liable to human frailties, Williamson v. State, 25 Md. App. 338, 341, we who have taken the cloth are hardly reassured. The fact that the judge felt compelled to volunteer such an assurance indicates that he was at least subconsciously influenced by the very thing he disclaimed. If bias or prejudice were truly dissipated simply by stating — or even believing — that one is not prejudiced, we would have had no need for judicial or legislative efforts to proclaim and enforce equal treatment. I have met but very few prejudiced people who recognized their prejudice — even among judges.

I must respectfully dissent.

      . To agree with appellant that bargained testimony may be more acidulously viewed by laymen than by judges is not to question judicial integrity. It simply acknowledges that judges are used to such “deals” — perhaps too used to them. Added to that is appellant’s numerical chance of having such testimony leave a bitter taste with the factfinder; a jury trial increases that possibility from one to twelve over a court trial.

      . Even if we charged appellant with the duty to inquire immediately as to the extent of his codefendant’s plea bargain upon being told of his sudden change of plea, I would be hard pressed to hold that a lapse of one week made the application untimely.


author: Davidson, J.,

text:
    ACTING DIRECTOR, DEPARTMENT OF FORESTS AND PARKS, etc. v. THOMAS J. WALKER, JR., et al., Trustees
    [No. 369,
    September Term, 1977.]

      Decided May 10, 1978.

      The cause was argued before Thompson, Davidson and Mason, JJ.

      Carl H. Lehmann, Special Attorney, with whom were Francis B. Burch, Attorney General, and Nolan H. Rogers, Assistant Attorney General, on the brief, for appellant.

      Michael P. Crocker, with whom were Piper & Marbury on the brief, for appellees.

       Note: Ceriiomri granted, Court of Appeals of Maryland, July 12,1978.

   Davidson, J.,

delivered the opinion of the Court.

On 20 April 1972, in the Circuit Court for Baltimore County, the appellant, the Department of Forests and Parks (the State) filed a petition for condemnation of certain land held in trust by Thomas J. Walker, Jr. and George B. Woelfel, Jr., the appellees (owners). On 9 November 1973, the State sought and obtained an ex parte order permitting it to enter the land “for the purpose of construction of an armory.” Thereafter, according to the owners, the State survey crews staked out an armory on the land. On 28 November 1973, a jury returned an inquisition in the amount of $1,224,000. On that date, judgment nisi was entered. Thereafter the State began construction. Judgment absolute was entered on 20 December 1973. On 31 May 1974, the Court of Appeals dismissed an appeal filed by the State, holding that the State had waived its right to appeal when it entered upon and took possession of the owners’ land.

In a series of letters, the owners requested the State to pay a “fair rate” of interest on the condemnation award, from 9 November 1973 to the date of payment, and the State refused to pay any interest. On 24 July 1974, the State deposited the amount of the award with the court. No funds were deposited for the payment of interest. On 6 September 1974, the owners withdrew the deposited funds pursuant to a court order which authorized the withdrawal “without prejudice to any and all claims of the [owners] for unpaid interest due for the State’s possession of the property herein condemned and/or upon the judgment rendered herein.”

On 22 December 1975, as a further proceeding in the condemnation case, the owners filed a “motion for summary judgment for delay damages.” This motion, as later amended, sought damages of $82,017.52, “the amount of investment return that the State itself, in fact, received upon said $1,224,000 sum by retaining and investing it [from 9 November 1973 to 24 July 1974] in the safe and conservative investments sanctioned by [Md. Ann. Code, art. 95, § 22 (1969 Repl. Yol. & Cum. Supp. 1977)].” It additionally sought damages of $12,802.29, “the amount of investment return that the State itself has received, during the period between July 24,1974 (when said $82,017.52 amount of delay damages or detention money was due to have been paid along with the $1,224,000) and [31 January 1977] ... by investing, rather than paying the defendants, the said $82,017.52.” On 15 April 1977, Judge John N. Maguire entered an order awarding the owners $94,819.81 in damages and costs. This appeal is from that order. We shall reverse.

The fifth amendment of the United States Constitution provides in pertinent part that private property shall not

“be taken for public use, without just compensation.”

Article III, § 40 of the Maryland Constitution provides:

“The General Assembly shall enact no Law authorizing private property, to be taken for public use, without just compensation, as agreed upon between the parties, or awarded by a Jury, being first paid or tendered to the party entitled to such compensation.” (Emphasis added.)

Maryland Real Property Code Ann. § 12-104 (a) provides:

“The damages to be awarded for the taking of land is its fair market value.”

The owners do not contend that the jury awarded them less than the fair market value of their land. Rather, they maintain that, because the State took possession of their land on 9 November 1973, they were entitled to be paid its fair market value on or before that date. They claim that, because the State’s delay in payment deprived them of the use of that money from 9 November 1973 to 24 July 1974, they are additionally entitled, as part of just compensation, to damages above the fair market value. They assert that, because the State’s refusal to pay those damages when due deprived them of the use of that money from 24 July 1974 to 31 January 1977, they are entitled to additional damages. They conclude that the damages should have been determined by applying the State’s rate of return on its investments during those periods to the amounts withheld.

I

- 9 November 1973 to 28 November 1973 -

The trial court erred in awarding additional damages from 9 November 1973 to 28 November 1973. The question of damages for that period should not have been considered because it previously had been settled.

A ruling of an appellate court upon a question becomes the “law of the case” and is binding on the courts and litigants in further proceedings in the same case. Neither questions which were decided nor questions that could have been raised and decided on appeal can be relitigated.

A decision of a trial court which finally determines the rights of the parties becomes the “law of the case” when no appeal is taken. Such a decision also is binding on the courts and litigants in further proceedings in the same case. Neither questions which were decided nor questions which could have been raised and decided in the trial court or on appeal can be relitigated in the same case.

Maryland Rules, Subtitle U, determines the procedure for “conventional” condemnation proceedings. Maryland Rule U16 b provides, among other things, that in a condemnation proceeding tried by a jury, the jury shall

“value justly and impartially the damages which the defendant will sustain by the taking.”

Maryland Rule U19 provides in pertinent part:

“a----The trier of fact shall render a special verdict in the form of an inquisition.

* * *

“g----The inquisition shall set forth the amount of damages, if any, to which each defendant or class of defendants is entitled or, if the court so orders, the total amount of damages awarded or both.”

These rules establish that in condemnation proceedings all questions relating to the amount of just compensation must be decided by the jury. Thus, any claim that the owners were entitled to additional damages because the State’s delay in payment deprived them of the use of money due them on 9 November 1973 could have been raised and decided in the trial court.

Here the question of just compensation was determined by the jury. The record does not show that the owners asked the jury to award damages for the loss of the use of money from 9 November 1973. The record does show that the owners did not appeal from the 20 December 1973 judgment entered on the jury’s verdict. Under these circumstances, the trial court’s award finally determined the owners’ right to damages sustained before judgment and became the “law of the case.” The owners’ claim for damages for loss of the use of money from 9 November 1973 to 28 November 1973, having previously been settled, could not be relitigated in the same case.

II

- 28 November 1973 to 24 July 1974 -

The trial court also erred in determining the amount of additional damages for the loss of the use of money from 28 November 1973 to 24 July 1974. Damages should not have been determined by applying the State’s rate of return on its investments during that period to the amount of the payment withheld, but rather by applying the legal rate of interest.

In Lore v. Board of Public Works, the Court of Appeals considered the question of whether, in conventional condemnation proceedings, an owner is entitled to interest from the date of the entry of judgment nisi until the time of payment. The Court recognized that, generally, the term “just compensation” is equated with fair market value. The Court concluded that, in condemnation cases, the General Assembly may grant owners more than the constitutional minimum of just compensation. It determined that “one of the extra elements of damage” authorized by the General Assembly was “interest on the award, computed from the date of the entry of the judgment nisi to the time the judgment is satisfied.” It held that the owners were entitled to interest on the compensatory award.

Lore establishes that, in conventional condemnation proceedings, an owner receives just compensation if awarded the fair market value of the property taken. An owner is not entitled to any other damages as part of just compensation. An owner who has suffered additional damage is entitled to be compensated only if and to the extent authorized by the Legislature.

Applying these principles to the instant case produces a clear result. Because the owners were awarded the fair market value of their land, they received just compensation. While they were not entitled to any other damages as part of just compensation, they were entitled to compensation for additional damages to the extent authorized by the Legislature. Having recognized that an owner suffers additional damage when payment of a condemnation award is delayed, the Legislature has authorized compensation for the loss of the use of money to the extent of the payment of interest from the date of the judgment nisi. Accordingly, we hold that the owners were entitled to interest from 28 November 1973 to 24 July 1974 at the legal rate of six percent per year.

Ill

- 24 July 1974 to 31 January 1977 -

The trial court’s determination of the amount of damages for the loss of the use of money from 24 July 1974 to 31 January 1977 was based upon its erroneous assessment of the amount of damages for the loss of the use of money from 28 November 1973 to 24 July 1974. Accordingly, that determination was also in error. We shall reverse.

Judgment reversed.

Case remanded for entry of an order consistent with this opinion.

Costs to be equally divided.

      . The Department of Forests and Parks was part of the Department of Natural Resources and was empowered to condemn land in the name of the State. 1969 Md. Laws ch. 154 § 8; 1962 Md. Laws ch. 36 § 42. On 1 January 1974, all the rights, powers and functions of the Department of Forests and Parks, including condemnation power, were transferred to the Department of Natural Resources. Md. Nat. Res. Code Ann. §§ 5-201 (b) and 5-208 (1974).

      . Md. Rule U19.

      . Md. Rule U21 a.

      . Md. Rule U21 d.

      . Acting Director, Dep’t of Forests & Parks v. Walker, 271 Md. 711, 319 A. 2d 806 (1974).

      . Md. Rule U23.

      . The owners’ motion to dismiss the appeal is without merit and is denied.

      . Md. Real Prop. Code Ann. § 12-104 (a) (1974).

      . Davis Sand & Gravel Corp. v. Buckler, 231 Md. 370, 373-74, 190 A. 2d 531, 532 (1963); Fidelity-Baltimore Nat’l Bank & Trust Co. v. John Hancock Mut. Life Ins. Co., 217 Md. 367, 371-72, 142 A. 2d 796, 798 (1958); Pasarew Constr. Co. v. Tower Apts., Inc., 208 Md. 396, 403, 118 A. 2d 678, 681 (1955); Smith v. Shaffer, 50 Md. 132, 136 (1878); Waters v. Waters, 28 Md. 11, 22 (1867); see Health Servs. Cost Rev. Comm’n v. Franklin Square Hosp., 280 Md. 233, 238, 372 A. 2d 1051, 1053-54 (1977).

      . Kloze v. Provident Sav. Bank, 220 Md. 469, 470-71, 154 A. 2d 711, 712 (1959); City of Baltimore v. Moore, 209 Md. 516, 523, 121 A. 2d 857, 861 (1956); Sansbury v. Belt, 53 Md. 324, 333 (1880).

      . These Rules also apply to “quick-take” condemnation proceedings authorized by art. Ill, §§ 40A-40D of the Maryland Constitution. Hammond v. State Rds. Comm’n, 241 Md. 514, 517, 217 A. 2d 258, 260 (1966).

      . Lore v. Board of Pub. Works, 277 Md. 356, 359-60, 354 A. 2d 812, 814 (1976).

      . 277 Md. 356, 354 A. 2d 812 (1976).

      . Id. at 358 n.3, 354 A. 2d at 814 n.3.

      . Id. at 358-59, 354 A. 2d at 814.

      . Id. at 359, 354 A. 2d at 814.

      . Id. at 359, 354 A. 2d at 814; Md. Real Prop. Code Ann., § 12-101 (Cum. Supp. 1977); Md. Rules, Subtitle U.

      . Northwestern Nat’l Ins. Co. v. William G. Wetherall, Inc., 272 Md. 642, 658, 325 A. 2d 869, 878 (1974); Picking v. Local Loan Co., 185 Md. 253, 265, 44 A. 2d 462, 469 (1945); Md. Const, art. Ill § 57; Md. Com. Law Code Ann. § 12-102 (1975); Md. Rule 642.


author: Mason, J.,

text:
    GILBERT LAWRENCE CLARK v. WARDEN, BALTIMORE CITY JAIL
    [No. 727,
    September Term, 1977.]

      Decided May 10, 1978.

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

      Mark Colvin, Assistant Public Defender, with whom was Alan H. Murrell, Public Defender, on the brief, for appellant.

      Maria A. Kendro, Assistant Attorney General, with whom were Francis B. Burch, Attorney General, William A. Swisher, State’s Attorney for Baltimore City, and Floyd D. Pond, Assistant State’s Attorney for Baltimore City, on the brief, for appellee.
   Mason, J.,

delivered the opinion of the Court.

This is an appeal from the Baltimore City Court ordering the extradition of appellant, Gilbert Lawrence Clark, to the Commonwealth of Pennsylvania. At the hearing below, appellant testified that he was in Baltimore and not in Pennsylvania on the date the crimes for which he was charged were committed. His testimony was corroborated by two witnesses, his father and a friend. The only evidence introduced on behalf of the demanding state were the following documents: (1) the Commonwealth of Pennsylvania’s warrant of requisition; (2) the Commonwealth of Pennsylvania’s warrant of arrest and indictment; (3) the State of Maryland’s warrant of rendition. These documents showed that appellant was charged with the commission of robbery and related crimes in Pennsylvania on April 15,1976.

On appeal appellant argues, in effect, that because no oral evidence was produced on behalf of the demanding state to rebut his testimony that he was not present in Pennsylvania on the date of the alleged crime, the trial court erred in denying his petition for writ of habeas corpus.

It is settled law in this State that:

The issuance of a warrant of rendition by the Governor of the asylum state raises a presumption that the accused is the fugitive wanted and it is sufficient to justify his arrest, detention and delivery to the demanding state____In order to rebut the presumption the accused must prove beyond a reasonable doubt either that he was not present in the demanding state at the time of the alleged offense or that he was not the person named in the warrant, and upon proof of the one or the other he is entitled to be released. Moreover, in this kind of habeas corpus proceeding “[t]he guilt or innocence of the accused may not be inquired into * * * except as it may be involved in identifying the person * * * charged with the crime.” Code, Art. 41, § 34 (1965 Repl. Vol.) It should be noted also that the presumption must be rebutted by “overwhelming” evidence,... thus “[m]ere contradictory evidence on the question of presence in or absence from the state demanding the accused is not sufficient * * *.”

Solomon v. Warden, 256 Md. 297, 300-01 (1969). (Citations omitted).

As to the issue of whether oral evidence is necessary to rebut the testimony of the accused, as argued by appellant, the authorities are in conflict.

The leading case requiring oral evidence in rebuttal in such a situation is State v. Limberg, 274 Minn. 31, 142 N.W.2d 563 (1966). In that case the testimony of the accused that he was not in the demanding state was not rebutted by any contradictory testimony. The precise question before the Supreme Court of Minnesota was:

Is the presumptive effect of the rendition warrant when supported by affidavits accompanying the demand for extradition sufficient in itself to repel the positive testimony of the appellant that he was not present in the demanding state? Stated another way: When the appellant takes the stand, and, while under oath and subject to cross-examination, positively declares that he was not present in the demanding state, must the demanding state present some testimony to contradict that declaration or may it merely rest upon the extradition papers and the affidavits therein?

In answering this question, the Court stated:

We agree that no useful purpose is served by unduly restricting extradition since the ultimate question of guilt or innocence can only be determined in the demanding state. Nevertheless, having in mind the expense, inconvenience, and jeopardy involved in defending against a criminal charge in another state, we hold that where an appellant positively and unequivocally testifies that he was not present in the demanding state at the time of the alleged offense, that state must present some testimony that will be subject to cross-examination by appellant’s counsel to support the allegation that he was present. This ruling places but little burden upon the demanding state because our decisions require only slight evidence to support the rendition warrant.

142 N.W.2d at 567. Accord, State Ex rel. Rhodes r. Omodt, 300 Minn. 129, 218 N.W.2d 461 (1974); State Ex rel. Wagner v. Hedman, 292 Minn. 358, 195 N.W.2d 420 (1972). See Commonwealth v. Allen, 224 Pa. Super. 157, 303 A. 2d 54 (1973) (Dissenting Opinion).

In Nelson v. People, 11 Ill. App.3d 1092, 297 N.E.2d 172 (1973) the State introduced the governor’s warrant as its authority for holding the accused; thereafter the accused testified that he was- not in the demanding state when the alleged crime was committed. Six other witnesses testified on behalf of the accused, and the State presented no evidence in rebuttal. The Appellate Court of Illinois stated:

Since the [State] introduced no evidence other than the extradition warrant and did not refute the credibility of the testimony offered by the [accused], we conclude that the [State] believed the extradition warrant itself was sufficient to create contradictory factual issues. We do not believe this position is tenable, since if true, the effect would be to give the warrant a conclusive presumption since in all cases the evidence would be merely contradictory____We believe the [accused] sustained his burden of proof and the evidence shows beyond a reasonable doubt that he was not a fugitive from justice from the demanding state.

297 N.E.2d at 173-74.

On the other hand, the leading case adopting the view that oral evidence is not necessary to rebut the testimony of an accused that he was not in the demanding state is Smith v. State of Idaho, 373 F. 2d 149 (9th Cir. 1967). There the accused sought another extradition hearing on the basis of newly uncovered evidence which purportedly showed that he was not present in the demanding state when his wife was murdered. At the prior evidentiary hearing, the State introduced a copy of the rendition warrant and the affidavits of several residents of the demanding state which indicated the accused was present on or about the time the offense was committed. Regarding the new evidence, which the accused sought to offer, the United States Court of Appeals, Ninth Circuit held at 373 F. 2d 156-57:

Even if all of the individuals listed by appellant claimed to have seen him in Oklahoma on or about October 26, 1961, this would present only a conflict in the evidence. For extradition purposes, such a conflict is not enough to release the accused....
Admittedly, the prisoner held for extradition has a heavy burden of proof. But this arises legitimately from the nature of an extradition proceeding, since essentially the court is reviewing the factual determination of the governor as to the presence of the accused in the demanding state, and the guilt or innocence of the accused is not in question.
“The inquiry whether the appellant is a fugitive from justice is one of fact, to be resolved by the [governor] to whom the demand for extradition is made, and his judgment thereon is not subject to judicial impeachment by habeas corpus unless it conclusively appears that the person sought to be extradited could not be a fugitive from justice under the law.”
The testimony of appellant’s proposed witnesses, by deposition or otherwise, would not incontrovertibly establish that appellant was not within Missouri on or about October 26,1961----The conflicting evidence appellant wishes to introduce can be fully explored and resolved at trial. (Citations omitted). (Emphasis supplied).

Of similar import see Hill v. Houck, 195 N.W.2d 692, 698 (Iowa, 1972) where the court said:

[W]e hold neither the federal statute quoted nor section 759.3, The Code, requires that the demanding state present oral testimony under the circumstances developed in the case before us to contradict the accused’s evidence he was not present in the demanding state.

See also Thurman v. State, 223 N.W.2d 248 (Iowa 1974), where the court said it is unnecessary to produce oral evidence to refute petitioner’s denial of presence in the demanding state. Accord Norton v. State, 93 Idaho 648, 470 P. 2d 413 (1970); In Re Baker, 310 Mass. 724, 39 N.E.2d 762 (1942); Ex parte Germain, 258 Mass. 289, 155 N. E. 12 (1927); Ex Parte Hatfield, 90 Tex. Crim. App. 293, 235 S. W. 591 (1921).

In Smith v. State of Idaho, supra, the accused further argued that the use of ex parte affidavits was improper to prove substantive facts in a habeas corpus proceeding since these facts were not subject to cross-examination. In resolving this issue the court observed:

The use of such affidavits in extradition proceedings has long been allowed.

The reason for allowing such hearsay evidence is sound — that in extradition proceedings, it is often impractical to transport the witnesses from the demanding to the asylum state to have their testimony in person.

373 F. 2d at 157.

Although the precise question at issue in the present case has never been raised in the appellate courts of Maryland, it has been answered. In Koprivich v. Warden, 234 Md. 465 (1964), four documents were admitted into evidence on behalf of the demanding state. These were (1) the indictment; (2) the arrest warrant together with the affidavit on which it was based; (3) a certified copy of the grand jury testimony; (4) a photograph and affidavit identifying appellant as the person charged in the indictment. Appellant and four witnesses testified that he was not in the demanding state at the time the crime was committed. There was no contradictory testimony by any witness on behalf of the demanding state to rebut the testimony of appellant and his witnesses. Koprivich argued that the documentary evidence was inadmissible; whereas appellant here argues that the documentary evidence, without more, is insufficient to justify denial of habeas relief. The Koprivich Court, in addition to holding that the strict rules of evidence were not applicable in extradition proceedings, held:

We have consistently held that the finding by the chief executive of the asylum state that the person whose extradition is demanded is a fugitive from justice and the issuance of the warrant of rendition “raises a presumption that the accused is the fugitive wanted, sufficient if unrebutted, to justify his arrest and detention and his delivery to the agent of the demanding state; unless he shows beyond a reasonable doubt that he was not a fugitive; if he does, he is entitled to his release.” Mere contradictory evidence on the question of presence in or absence from the state demanding the accused is not sufficient to overcome the presumption.
Clearly the evidence produced at the habeas corpus hearing was not such as showed beyond a reasonable doubt that the otherwise controlling presumption had been overcome. The record presents “only a conflict of evidence” as to whether the appellant was in St. Clairesville, Ohio, or Baltimore, Maryland, on the evening of November 22, 1961.

Id. at 469-70. (Citations omitted).

In Shields v. State, 257 Md. 384 (1970) it was said:

The normal rules of evidence and procedure do not apply in an extradition hearing. Frequently such hearings proceed on affidavits where the opportunity to confront, cross-examine and impeach obviously is not present.

Id. at 390. (Citations omitted).

Koprivich and Shields, establish that the rule in Maryland is that oral evidence is not necessary in an extradition proceeding to rebut the testimony of the accused that he was not present in the demanding state at the time of the offense. Accordingly, we perceive no error by the trial court in not requiring the State to present oral evidence to rebut the testimony of appellant and his witnesses.

We utter a word of caution. This opinion does not purport to hold that the trial judge can arbitrarily disregard evidence presented by the accused. Once the accused presents evidence of absence from the demanding state, the court must evaluate all evidence presented and determine whether, on balance, the accused has met his burden. If the court finds that the accused failed to carry his burden of proof, because it disbelieved the witnesses, the better practice would be to enter a specific finding to that effect. See Walton v. State, 98 Idaho 442, 566 P. 2d 765 (1977).

Order affirmed.

Costs to be paid by appellant.


author: Thompson, J.,

text:
    HELEN KASHANSKY v. STATE OF MARYLAND
    [No. 879,
    September Term, 1977.]

      Decided May 10, 1978.

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

      Victoria A. Salner, Assistant Public Defender, with whom was Alan H. Murrell, Public Defender, on the brief, for appellant.

      Stephen Rosenbaum, Assistant Attorney General, with whom were Francis B. Burch, Attorney General, Andrew L. Sonner, State’s Attorney for Montgomery County, and David C. Driscoll, Assistant State’s Attorney for Montgomery County, on the brief, for appellee.
   Thompson, J.,

delivered the opinion of the Court.

Helen Kashansky, the appellant, was convicted in the Circuit Court for Montgomery County, of false pretenses by obtaining merchandise with a bad check which was not made good within 10 days. A sentence of eighteen months was imposed. On appeal, appellant attacks the admissibility of certain evidence and the correctness of the trial judge’s instructions.

On October 1, 1976, David Kashansky entered a Radio Shack Store in Gaithersburg, Maryland and attempted to purchase a stereo receiver with a check. The store manager refused to accept the check because Mr. Kashansky did not have a driver’s license or charge card. Mr. Kashansky then made a $60 cash deposit on the receiver, which the store put on “lay away.” He stated his wife would come in later to write a check for the remaining balance. On October 3 Mr. Kashansky returned with his wife, the appellant, and appellant wrote a check for $348.09, which represented the balance owed on the receiver and the cost of two speakers.

Appellant’s check was subsequently returned to the store from the bank marked “nonsufficient funds.” After “a bit of trouble” trying to locate the Kashanskys, the store manager, some two weeks after the check had been returned, managed to contact Mr. Kashansky at his place of employment. At that time Mr. Kashansky said he would take care of the problem. Two or three more telephone calls followed, but some six weeks after the check had been returned the Kashanskys had not made the check good. The morning of trial, however, the Kashanskys presented a money order for the full amount.

The store manager lodged a complaint against appellant on November 5, 1976, and on November 30 appellant came voluntarily to police headquarters. There she submitted to arrest and made a statement admitting that she wrote the check to Radio Shack, but stated it was written with the understanding that her husband would deposit money in the account to cover the check.

At the trial the State, through Laura Benoit, branch manager of the Union Trust Company in Rockville, introduced a bank statement representing the joint account of David and Helen Kashansky. Ms. Benoit testified the statement reflected that a check in the amount of $348.09 was presented to the bank for payment on October 5. At that time, the balance in the Kashansky account was $68.23. Deposits of $100, $500, $94 and $360 were subsequently made on October 7,15,19 and 25 respectively. The October 15 deposit of $500, however, was made by a check which was returned unpaid. From October through the end of December, fifty checks were written on the account, and 17 were returned. Although at the end of October, the Kashanskys’ account had a balance of $164.98, the account had a negative balance of $5.00 at the end of November and a negative balance of $12.19 at the end of December. Defense counsel entered an objection to this testimony on the basis that Ms. Benoit could not testify whether the checks had been written by David or Helen Kashansky.

The only defense witness was David Kashansky, who testified that although he and his wife wrote checks on the joint account, he was solely responsible for putting money into the account and keeping track of finances. He also stated that between October 1 and October 3 he told appellant he was expecting a $500 check, which he would deposit to cover the Radio Shack purchase. When he was contacted by Radio Shack, he explained that the $500 check that was supposed to cover the purchase had bounced and offered to return the equipment but was told by Radio Shack that “it just wasn’t their policy” to take back goods. Mr. Kashansky admitted to a worthless check conviction that he had incurred the previous year.

I The Evidentiary Question

Appellant argues that the admission of the evidence concerning the 17 bad checks which were written between October 1 and December 31 was erroneous without a showing that the checks had been written by the appellant. In its brief the State argues that the admissibility of the evidence was harmless, but at oral argument conceded that its admission was erroneous.

Although we agree thát the admission of the evidence was erroneous, we cannot agree that the error was harmless. There was evidence that appellant wrote the check at the request of her husband and only because Radio Shack would not accept his check without the presentation of a driver’s license or a credit card. A fact finder could hardly hear the evidence that 17 other checks had been returned on the same joint account within a period of three months without drawing a prejudicial inference that appellant was probably involved in at least some of them, yet that inference may be entirely contrary to fact. It requires no citation of authority to show that appellant should not have been convicted on the acts of her husband. We will, therefore, reverse and remand the case for a new trial.

II The Instructions

For the guidance of the trial judge on retrial, we deem it advisable to discuss appellant’s contention that the instructions shifted the burden of proof on the issue of fraudulent intent in violation of Mullaney v. Wilbur, 421 U. S. 684, 95 S. Ct. 1881, 44 L.Ed.2d 508 (1975) and State v. Evans, 278 Md. 197, 362 A. 2d 629 (1976). The instruction was based on an inference contained in Md. Code, Art. 27, § 142 (1976 Repl. Vol.). Thus, in order properly to address appellant’s argument we must examine the effect of Mullaney and Evans on the Worthless Check Act before considering the actual instruction that was given. Md. Code, Art. 27, § 142 provides in part:

“The giving of the aforesaid worthless check, draft or negotiable instrument, or of the credit card or purported credit authorization, shall be prima facie evidence of intent to cheat or defraud; provided that if such person shall be a bona fide resident of the State of Maryland and shall deposit with the drawee of such paper or the acceptor of the credit card or purported credit authorization within ten days thereafter funds sufficient to meet the same, with all costs and interest which may have accrued he shall not be prosecuted under this section, and no prosecution either by presentment, indictment or otherwise, shall be instituted or commenced until after the expiration of said period of ten days.” (Emphasis added).

The term prima facie evidence as employed in § 142 is somewhat ambiguous as it is susceptible of two different meanings. The term can refer to the quantum of evidence necessary to warrant submission of the case to the jury or it can refer to shifting the burden of producing evidence. See 9 J. Wigmore, Evidence § 2494 (3d ed. 1940). Neither of these meanings was initially adopted by the Court of Appeals in construing the statute. Instead, the Court indicated that the Act shifted the burden of proof to the accused and relieved the State of the need to show fraudulent intent. Marr v. State, 227 Md. 510, 514, 177 A. 2d 862, 864 (1962); Lyman v. State, 136 Md. 40, 49-50, 109 A. 548, 552 (1920). More recently, however, the statute has been construed as creating a rebuttable presumption which casts the burden of showing the absence of a fraudulent intent on the accused. See State v. Sinclair, 274 Md. 646, 651-652, 337 A. 2d 703, 707 (1975); Maki v. State, 239 Md. 811, 314, 211 A. 2d 711, 713 (1965); Flannigan v. State, 232 Md. 13, 18, 191 A. 2d 591, 593 (1963); Waye v. State, 231 Md. 510, 513-514, 191 A. 2d 428, 430 (1968); Willis v. State, 205 Md. 118, 124-125, 106 A. 2d 85, 88 (1954); Riggs v. State, 34 Md. App. 324, 328-329, 367 A. 2d 22, 35 (1976); Quinn v. State, 1 Md. App. 373, 376, 230 A. 2d 368, 370 (1967). Construed as a rebuttable presumption § 142 simply means that once the prosecution has proved the underlying fact to which the presumption attaches, there is sufficient evidence for the jury to find fraudulent intent, although it is not compelled to do so even in the absence of any rebuttal evidence by the accused. As such, § 142 is more in the nature of a permissible inference rather than a true presumption. See Evans v. State, 28 Md. App. 640, 702, 349 A. 2d 300, 338-339 (1975), aff'd, 278 Md. 197, 362 A. 2d 629 (1976); Comment, Unburdening the Criminal Defendant: Mullaney v. Wilbur and the Reasonable Doubt Standard, 11 Har. C.R.-C.L. L. Rev. 390, 419 n. 129 (1976). See also W. LaFave and A. Scott, Handbook on Criminal Law § 8 at 51 (1972); Comment, Statutory Criminal Presumptions: Reconciling the Practical With The Sacrosanct, 18 U.C.L.A. L.Rev. 157,158-159 (1970). Interpreted in this manner, § 142 is in accord with the construction generally given worthless check statutes. See State v. Haremza, 213 Kan. 201, 515 P. 2d 1217 (1973); Patterson v. Commonwealth, 556 S.W.2d 909 (Ky. App. 1977). W. LaFave and A. Scott, Handbook on Criminal Law, § 8 at 51 n. 51 (1972). See also, 35 A.L.R. 375 and 95 A.L.R. 486.

In considering the effect of Mullaney and Evans on the permissible inference contained in § 142 we start with the proposition that due process prevents an accused from being convicted absent proof beyond a reasonable doubt on each element of the offense charged. Patterson v. New York, 432 U. S. 197, 97 S. Ct. 2319, 2330, 53 L.Ed.2d 281 (1977); Mullaney v. Wilbur, supra, 421 U. S. at 704, 95 S. Ct. at 1892; In Re Winship, 397 U. S. 358, 364, 90 S. Ct. 1068, 1073, 25 L.Ed.2d 368 (1970); State v. Evans, supra, 278 Md. at 206, 362 A. 2d at 635. The burden which the State must bear has two aspects: (1) the burden of producing evidence, and (2) the burden of persuasion. W. LaFave and A. Scott, Handbook on Criminal Law % 8 at 45 (1972). A permissible inference does not shift either of these burdens. Dinkins v. State, 29 Md. App. 577, 583, 349 A. 2d 676, 681, aff’d, 278 Md. 238, 362 A. 2d 91 (1976); Evans v. State, supra, 28 Md. App. at 703, 349 A. 2d at 339. As such, statutes containing permissible inferences do not violate due process as long as the evidence necessary to invoke the inference is sufficient for a rational juror to find the inferred fact beyond a reasonable doubt. See Barnes v. United States, 412 U. S. 837, 843, 93 S. Ct. 2357, 2362, 37 L.Ed.2d 380 (1973); Turner v. United States, 396 U. S. 398, 416, 90 S. Ct. 642, 652, 24 L.Ed.2d 610 (1970); Dinkins v. State, supra, 29 Md. App. at 581, 349 A. 2d at 679-680.

In the instant case the trial judge, in instructing the jury on the applicable law, made the following comments concerning the permissible inference contained in § 142:

“In all criminal cases of which this is one, the burden is on the State to prove guilt beyond a reasonable doubt. There is no burden on the defendant in any criminal case.
“The State carries the burden throughout____
“[T]he giving of a worthless check or of a credit card of purported credit authorization shall be prima facie evidence of intent to cheat or defraud.
“Proof may be made by direct evidence or circumstantial evidence, or a combination of both; but in any event it must satisfy you beyond any reasonable doubt of guilt.
“While the giving of this check is prima facie evidence of guilt, the State has the burden to prove beyond any reasonable doubt the guilt as I have indicated to you, and the extent to which you believe the Defendant’s evidence will help you to reject or accept an inference from the State’s proof.”

Although we do not think the State should have conceded the instruction shifted the burden of persuasion, we believe the instruction could be improved if reference to the statute and the term prima facie were omitted and the jurors were merely instructed that they are permitted, but not required, to infer the existence of an intent to defraud from the presentation of a worthless check not made good within ten days unless, considering all the evidence presented, they have a reasonable doubt as to the existence of such an intent. See United States v. Gainey, 380 U. S. 63, 71 n. 7, 85 S. Ct. 754, 759 n. 7, 13 L.Ed.2d 658 (1965).

Judgment reversed.

Case remanded for a new trial.

Costs to be paid by Montgomery County.

      . The State concedes that the instruction was unconstitutional but argues the error was harmless and was not preserved for appellate review. As we are reversing the judgment on other grounds, we need not consider whether the error was harmless or the objection was properly preserved.

      . The use of the term presumption can be very confusing. McCormick notes that one author has identified eight different uses of the term by the courts. C. McCormick, Handbook of the Law of Evidence § 342, p. 803 (2a ed. E. Cleary 1972). Traditionally presumptions deal with questions of law and are usually classified according to the interpretation given them by Morgan or Thayer and Wigmore. See generally, 9 J. Wigmore, Evidence §§ 2490-2492 (3d ed. 1940); Morgan, Some Observations Concerning Presumptions, 44 Harv. L. Rev. 906 (1931); J. Thayer, Preliminary Treatise on Evidence ch. 8 (1898). Under the Morgan approach a presumption shifts the actual burden of persuasion. However, under the Thayer-Wigmore approach the burden of persuasion does not shift but the burden of producing evidence does. The effect of this presumption was discussed in Evans v. State, supra, 28 Md. App. at 722-723, 349 A. 2d at 350 where we stated:
      “A presumption in the Thayer-Wigmore tradition simply places upon a defendant the onus of producing evidence, or of relying at his risk upon evidence produced by the State, sufficient to generate a jury issue with respect to a particular defense. Once the issue is fenerated by evidence, the presumption totally dissipates (the ubble bursts) and the State assumes the burden of persuasion on that issue beyond a reasonable doubt. Since the presumption has totally served its purpose once a jury issue has been created, the jury never hears of the presumption. If the issue has not been generated by evidence, the jury never receives the issue. Once the issue is generated, the jury gets the issue with the burden of persuasion thereon falling upon the State. The preliminary skirmishing on the generation vel non of the jury issue is of no concern to the jury itself.”
      These uses of the term presumption can be compared with inferences which are no more than part of the inductive reasoning process by which proof of one fact leads to the existence of another fact. See Evans v. State, supra, 28 Md. App. at 702, 349 A. 2d at 338-339.

      . As a practical matter an inference may require the accused to produce evidence to negate an element of a crime or run the risk of conviction, but the Supreme Court has stated that this does not render the use of inferences unconstitutional. Barnes v. United States, 412 U. S. 837, 846 n. 11, 93 S. Ct. 2357, 2363 n. 11, 37 L.Ed.2d 380 (1973).

      . While the Supreme Court has not specifically held that the due process clause requires use of the beyond a reasonable doubt standard, a number of courts and commentators have indicated the use of the standard is constitutionally mandated. See United States v. Johnson, 438 F. 2d 1160 (D.C. Cir. 1970); Patterson v. Commonwealth, supra; State v. Alcantara, 87 Wash. 2d 393, 552 P. 2d 1049 (1976); C. McCormick, Handbook of the Law of Evidence § 344 at 816 (2d ed. E. Cleary 1972); Comment, Unburdening the Criminal Defendant: Mullaney v. Wilbur and the Reasonable Doubt Standard, 11 Harv. C.R.-C.L. L. Rev. 390 (1976); Note, The Unconstitutionality of Statutory Criminal Presumptions, 22 Stan. L. Rev. 341 (1970); Comment, Statutory Criminal Presumptions: Reconciling the Practical with the Sacrosanct, 18 U.C.L.A. L.Rev. 157 (1970). Cf. Dinkins v. State, supra, 29 Md. App. at 581, 349 A. 2d at 680 (reasonable doubt standard applied). See also Ashford and Risinger, Presumptions, Assumptions, and Due Process in Criminal Cases: A Theoretical Overview, 79 Yale L.J. 165 (1969); Christie and Pye, Presumptions and Assumptions in the Criminal Law: Another View, 1970 Duke L.J. 919.


author: Moore, J.,

text:
    TUXEDO CHEVERLY VOLUNTEER FIRE COMPANY, INC. v. PRINCE GEORGE’S COUNTY, MARYLAND
    [No. 894,
    September Term, 1977.]

      Decided May 11, 1978.

      The cause was argued before Davidson, Moore and Melvin, JJ.

      Robert J. Booze, with whom were Jeffrey R. Schmieler and Margaret A. Beller on the brief, for appellant.

      John R. Barr, Deputy County Attorney, and Dennis M. Gottesmann, Associate County Attorney, with whom was James C. Chapin, County Attorney for Prince George’s County, on the brief, for appellee.
   Moore, J.,

delivered the opinion of the Court.

In this action for specific performance of an agreement between a volunteer fire company in Prince George’s County, and the County, the chancellor denied the relief prayed on ultra vires grounds but ordered a rescission of the contract and the return of the parties to their respective positions prior to its execution. The court reasoned that the agreement was unenforceable because it involved “alienation” of the County’s police power. We concur that the contract was not susceptible of specific performance but our finding is based upon appellee’s alternative defense — pleaded, briefed and argued below but not ruled upon by the court — that the agreement was not approved by legislative act of the Council as required by the Charter of the County. Accordingly, we do not address the police power issue.

I

On November 22, 1974, appellant, Tuxedo Cheverly Volunteer Fire Company, entered into a written contract with appellee, Prince George’s County, whereby the Company agreed to transfer all its real and personal property to the County in exchange for the County’s promise to pay all encumbrances on the property and to provide the Company with increased professional manpower, pension and insurance benefits for firefighters, a new ladder truck, and other equipment and services. The chief covenant relating to manpower required the County to provide:

“Professional firefighters for the operation of the fire station to be known as Tuxedo-Cheverly Station; minimum staffing for each platoon needed for 24-hour coverage shall consist of no less than 4 men, one of whom shall be an officer and one of whom shall be a technician, for the period of one year which commences with the signing of this Agreement; no less than 6 men shall be provided by the County thereafter, one of whom shall be an officer, one of whom shall be a technician and one of whom shall be an Emergency Medical Technician for ambulance duty on each platoon needed for 24-hour coverage.”

The equipment needs of the Company included a new ladder truck, a vehicle for transporting staff, firefighting gear, and “Page Boy” monitors. The County also agreed to make annual payments in the amount of $5,500 to the Company. This provision was contingent upon the appropriation of the necessary funds by the County Council and, in the event that such funds were not made available, the real and personal property of the Company were to be returned. The agreement was executed by the president of the Company and the then County Executive for Prince George’s County, William W. Gullett.

In accordance with the contract, the Company’s property was transferred to County ownership. The County complied with a number of its obligations, but the gravamen of appellant’s complaint was that the County failed to provide the six professional firefighters, the new ladder truck, and increased insurance benefits. The Company filed a bill of complaint for specific performance in the Circuit Court for Prince George’s County against Winfield M. Kelly, Jr., County Executive, Frank P. Briguglio, the late County Fire Chief, and the County. The demurrers of the County Executive and Fire Chief were sustained, and trial proceeded before Judge James F. Couch, Jr.

At the conclusion of the plaintiff’s case, the County moved for a “directed verdict” (more properly, a motion to dismiss under Md. Rule 535), alleging three grounds: first, that the Company had failed to show any harm resulting from the County’s refusal to provide increased manpower; second, that the contract was void since it had not been approved by the County Council, as was required under § 823 of the Charter for Prince George’s County for any future appropriation of funds, and third, that the contract was void by reason of alienating the police powers of the County. The chancellor denied the motion.

During the course of the defendant’s case, the County called as a witness one Gloria A. Garner, the records manager in the Office of the Clerk to the Council of Prince George’s County. She testified that the contract between the fire company and the County had never been approved by the County Council through resolution or bill, and that no minute item appeared in the Council records concerning the contract. This testimony was unrebutted by the Company. The chancellor took the case under advisement, and requested that the parties submit memoranda of law.

In its memorandum, the County reiterated the arguments made in its motion for “directed verdict” relating to absence of harm and alienation of police power; the County also argued that the contract was ultra vires and unenforceable under § 823 of the County Charter, because it required appropriations for a future fiscal year and legislative approval had not been obtained. Plaintiff submitted a reply memorandum in which it was contended with respect to the latter question that the County had impliedly ratified the contract by accepting its benefits, and could not be permitted to avoid performance on the ground that the contract was ultra vires or illegal.

The court subsequently filed a written opinion, finding that the contract was void as an alienation of the police power of the County by virtue of “forc[ing] the Fire Chief to assign a specific number of firefighters to a particular station” and thereby “infringing] on his ability to maximize the use of a limited amount of manpower under his command.” No disposition was made of the County’s argument that the contract was void under § 823 of the Charter. A final decree was then issued denying specific performance and ordering “that the parties be returned to their respective positions prior to November 22, 1974.”

II

As a threshold proposition, we perceive no obstacle to our consideration of the invalidity of the contracting procedure in that the issue was not decided by the lower court. As has already been noted, the question was fully briefed below and was the subject of sworn testimony on behalf of the County, unrebutted by the fire company. The County, having prevailed below on the principle of alienation of police power, did not argue in its brief on appeal that the provisions of § 823 of the Charter had been violated. That contention was renewed, however, in the County’s oral argument on appeal. We consider it properly before us.

Maryland Rule 1085 provides:

“This Court will not ordinarily decide any point or question which does not plainly appear by the record to have been tried and decided by the lower court; but where a point or question of law was presented to the lower court and a decision of such point or question of law by this Court is necessary or desirable for the guidance of the lower court or to avoid the expense and delay of another appeal to this Court, such point or question of law may be decided by this Court even though not decided by the lower court.” (Emphasis added.)

The Rules Committee note to Rule 885, the corresponding rule for the Court of Appeals, and to which Rule 1085 is virtually identical, is indicative of an intent that appellate courts exercise a measure of discretion in considering issues tried but not decided below:

“It should be noted that Rule 885 is broader than the former rules in that in certain cases the Court of Appeals may decide a question presented to but not decided by the lower court. For instance, a case may present two separate legal questions both of which might be argued fully in the lower court. It might be that the lower court would decide one of the questions and then deem it unnecessary to decide the other. Under this Rule the Court of Appeals could decide both questions.”

Such discretion may, in our view, very appropriately be exercised in a case involving the specific performance of a contract. There, the validity of the agreement is a condition precedent to the grant of such relief and, indeed, the Court of Appeals has indicated a disposition in such cases to consider matters bearing upon the validity vel non of the agreement, even if not specifically raised at the trial level. Smith v. Biddle, 188 Md. 315, 318, 52 A. 2d 473 (1947). In the case cited, an action for specific performance of a contract for the sale of realty where the court reversed a decree directing specific performance, the following statement appears in the opinion:

“Appellee seems to think that Rule 9 of this Court, relating to appeals generally, and Section 40 of Article 5, Code, 1939, bar the appellants from raising in this court matters not presented and argued before the chancellor, but we will pass the matter with the comment that this court will always inquire into the question of whether a contract sought to be specifically enforced is in form that the law requires. Certainly our rule, and the provisions of the code cited, would not bar this court in an inquiry as to whether a contract for the sale of land was violative of the Statute of Frauds, or whéther a third party had authority to sign a contract on behalf of the vendor; or whether the contract was so uncertain and duplicitous as to be unenforceable.” (Emphasis added.) 188 Md. at 318, 52 A. 2d at 474

The above language is strikingly apposite to the instant case and the rule implied therein is applicable with a fortiori effect where, as here, the issue was an integral part of the proceedings below. Compare Eastgate Associates v. Apper, 276 Md. 698, 350 A. 2d 661 (1976); Pride Mark Realty, Inc. v. Mullins, 30 Md. App. 497, 510, 352 A. 2d 866, 873 (1976).

Unquestionably, the contract between the County and the fire company did call for expenditure of funds by the County in later fiscal years, and thus was subject to the provisions of § 823 of the Charter, previously quoted. This is exhibited most clearly by the provisions of the contract obligating the County to provide a minimum number of professional firefighters to the Company, and particularly for that number to be increased from four to six after a period of one year, and for the County to provide a new ladder truck and other equipment and insurance benefits to the Company. It is undisputed that the contract was never formally approved by legislative act of the Prince George’s County Council.

Our review of the leading authorities in this State and elsewhere indicates that, as a general rule, such a contract is void. However, as appellant pointed out below, the County did receive the benefit of the contract, when title to the fire company’s real and personal property was transferred to its name. Therefore, we shall consider the further question of whether the County is in the position of having ratified the contract by part performance and by accepting its benefits.

Ill

A leading Maryland case on the issue of whether the County’s failure to follow the directives of its Charter renders the contract void is Cohen v. Baltimore County, 229 Md. 519, 185 A. 2d 185 (1962). Cohen was an action brought in equity to require specific performance of an agreement obligating the County to construct a road through the site of a shopping center, in exchange for a realty company’s granting the County a right of way over the property. The right of way was indeed conveyed, but the county executive later refused to allot funds for building the road; the County then claimed that the agreement had not been executed with the requisite formalities to be binding upon it. The Court upheld the contract, finding no lack of clarity or unfairness, or other reason for not enforcing the County’s obligation:

“So, as we see it, unless there are charter or statutory provisions to the contrary, the county executive not only had power to make the agreement in controversy, but authority to give it legal effect by approving it in the form in which it had been prepared to evidence the intentions of the contracting parties.” 229 Md. at 523-24, 185 A. 2d at 188. (Emphasis added.)

A different result obtained as to a related question in the earlier case of Renshaw v. Grace, 155 Md. 294, 142 A. 99 (1928), where a bill was brought to enjoin members of a commission named to purchase land and equipment for a municipal fire department from conveying the purchase price to the vendors without first receiving approval from the mayor and council of Easton. The court found that the actions of the commissioners were invalid, stating:

“The contemplated action by the commission is wholly without authority and illegal. It is an attempt by them to make a purchase on their own initiative and without the participation, authorization, or approval of the mayor and council____” 155 Md. at 300, 142 A. at 101.

These cases are consistent with the well-recognized general principle that a county or municipality can make a contract only in the manner prescribed by the legislature, and that if essential formalities are lacking, the contract is invalid and unenforceable. In 10 McQuillin on Municipal Corporations § 29.21 (3d ed. 1966), it is stated:

“The mode of contracting, as prescribed by law, is the measure of the municipality’s power to contract, and is exclusive. A specific designation of the manner in which contracts by municipal corporations shall be made operates as a limitation upon any general contractual power which is conferred.
“Many courts are firm in holding that municipal officers not only derive their powers from the law, but that such powers must be exercised in strict accordance with the mode prescribed therein. The difference between contracts of a private person and those of an officer of a corporation is this: An individual has the right to make, alter, or ratify a contract at his own will with the consent of the other contracting party, or if he stands by and permits others to work for him, and accepts the work, the law implies a promise to pay its values; whereas, an officer of a corporation has no power to make or alter a contract unless it be duly authorized, made or altered in the manner prescribed by the charter or statute from which the power is derived. Thus, for example, a charter provision that contracts are not binding unless made in writing by order of the council, signed by the mayor, and the draft thereof approved by the city attorney and council, is valid and mandatory." (Emphasis added.)

McQuillin further distinguishes between contracts which are illegal or irregularly executed, and those which are ultra vires, or outside the power of the municipal corporation to make. Where an “illegal” contract has been performed in good faith and benefits the public, recovery may generally be had in the event of breach. 10 McQuillin on Municipal Corporations, supra § 29.10. The consequences for the injured party are more severe, however, where the contract is ultra vires:

“If a contract is ultra vires it is wholly void and (a) no recovery can be had against the municipality thereon; (b) there can be no ratification, except by the legislature; (c) the municipality cannot be estopped to deny the validity of the contract; and (d) there can be no recovery on an implied contract, although it has been executed and the municipality has received the benefit of the contract.” Id. (Emphasis added.)

It need scarcely be added that, being “wholly void,” the contract may not be specifically enforced.

Pertinent to the question of whether the County’s failure to secure the approval of the Council has the effect of precluding subsequent ratification is the following statement from 10 McQuillin on Municipal Corporations, supra § 29.104c:

“[N]o ratification or estoppel can make lawful a municipal contract which is beyond the scope of the corporate powers, or which is not executed in compliance with mandatory conditions prescribed in the charter or statutes, or which is contrary to a declared policy adopted to protect the public. The notice imputed to all persons dealing with a municipal corporation of the limits of its powers, is in some cases advanced as the reason upon which these rules are based.” (Emphasis added.) See also Lipsitz v. Parr, 164 Md. 222, 227-28, 164 A. 743, 745-46 (1933); Gontrum v. Mayor of Baltimore, 182 Md. 370, 35 A. 2d 128 (1943); 63 C.J.S. Municipal Corporations § 986.

It is apparent, therefore, that a contract which is ultra vires and void cannot be ratified by a municipal corporation; accord, Packard v. Hayes, 94 Md. 233, 252, 51 A. 32, 36 (1902); and that a contract executed in disregard of a mandatory charter provision falls within this category. Ratification of a void contract may occur only if the authority empowered by charter or statute to make the contract subsequently performs the prescribed acts of authorization. Hailey v. King County, 149 P. 2d 823 (Wash. 1944).

A legislative constraint on the power to contract similar to the charter provision in the instant case was involved in Town of Gila Bend v. Walled Lake Door Co., 490 P. 2d 551 (Ariz. 1971). There, a private corporation brought suit against the town and members of the town council, seeking damages for breach of an agreement to construct and install a water main, and seeking specific performance of the agreement. The town alleged, inter alia, that the contract was void under § 42-303, subsec. D of the Arizona Revised Statutes, which provided:

“No expenditures shall be made for a purpose not included in such budget, and no expenditure shall be made, nor debt, obligation or liability incurred or created in any fiscal year in excess of the amount specified for each purpose in the budget for such fiscal year as finally adopted except when authorized under and pursuant to the provisions of § 42-308, whether or not the county, city or town has at any time received, or has on hand, funds or revenue in excess of those required to meet expenditures, debts, obligations, and liabilities incurred under such budget.”

The court in Gila Bend found no violation of the statute since funds for the water line had been partially made available, for that specific purpose, even though future appropriations would also be required. It noted, however:

“In a proper case, the principles of waiver and estoppel cannot be applied to circumvent stated legislative intent and policy, nor can a contract which violates A.R.S. § 42-303, subsec. D and is, therefore, void ab initio be ratified or approved in any manner by defendant or its officers or any other person so as to create an enforceable liability. City of Phoenix v. Kidd, 54 Ariz. 75, 92 P. 2d 513 (1939).” 490 P. 2d at 558. See also Layne v. City of Windsor, 442 S.W.2d 497 (Mo. 1969).

IV

It is our conclusion that the contract between the County and the fire company was void ab initio, and not subject to implied ratification. Judge Couch reached the same conclusion, though for a different reason, and went on to hold that the parties should “be returned to the status quo prior to their entering into the contract.” We agree.

As stated in 10 McQuillin on Municipal Corporations, supra § 29.131:

“It is a well-settled general rule that where a municipality has received the benefits of a contract, equity will not cancel or set it aside without compelling the municipality to do equity by restoring the benefits received thereunder.”

This principle was given effect in J. A. & W A. Hess, Inc. v. Hazle Township, 363 A. 2d 844, 847 (Pa. Common. 1976), the court noting:

“[W]here the underlying contract is found to be invalid because it is ultra vires, improperly ratified by the municipal body, etc., the courts will leave the parties in a status quo posture if at all possible, and will not grant relief to a party which would have the effect of changing the pre-existing status quo. Kreusler v. McKees Rocks School District, 256 Pa. 281, 100 A. 821 (1917).” (Emphasis added.)

The restoration of the status quo, prior to November 22, 1974, will necessitate that the County return the real and personal property acquired from the fire company pursuant to the agreement. This is in accord with the general rule in this State relating to rescission of contracts in equity. See Funger v. Mayor of Somerset, 244 Md. 141, 223 A. 2d 168 (1966); Lazorcak v. Feuerstein, 273 Md. 69, 327 A. 2d 477 (1974).

Order affirmed; appellant to pay the costs.

      . Section 823 of the Charter for Prince George’s County, entitled “Appropriation Control and Certification of Funds,” provides, in pertinent part:
      “Nothing in this Charter shall prevent the making of contracts providing for the payment of funds at a time beyond the fiscal year in which such contracts are made, provided the nature of such transactions reasonably requires the making of such contracts. Any contract, lease, or other obligation requiring the payment of funds from the appropriations of a later fiscal year shall be made or approved by legislative act.” (Emphasis added.)
      The Charter, adopted on November 3, 1970, was amended in 1974 and in 1976. The quoted sentences, however, remain unaltered throughout.

      . In Paape v. Grimes, 256 Md. 490, 495-96, 260 A. 2d 644, 647 (1970), the Court of Appeals overruled Smith v. Biddle, supra, and other cases, to the extent they indicated that a “rate of interest” must be expressed in a contract in order to make it specifically enforceable. This, of course, bears no relevance to the issue here presented.