author: Menchine, J.,

text:
    FRAN REALTY, INC. et al. v. EDWARD THOMAS, JR. et al.
    [No. 381,
    September Term, 1975.]

      Decided February 27, 1976.

      The cause was argued before Powers, Gilbert and Menchine, JJ.

      Eugene P. Smith, with whom was Perry Raabe on the brief, for appellants — cross-appellees.

      Robert M. Wright, with whom were Whiteford, Taylor, Preston, Trimble & Johnston on the brief, for appellees — cross-appellants, Edward Thomas, Jr., and Angela Thomas. Leonard Z. Bulman for other appellees — cross-appellants.
   Menchine, J.,

delivered the opinion of the Court.

Fran Realty, Inc., Phyllis Realty, Inc. and Harriett Realty, Inc., associated together under the trade name “Ridge Realty Company,” hereinafter called “developers,” were the owners and developers of a tract of land known as “Southgate,” in Anne Arundel County, Maryland.

In early 1972 developers entered into separate contracts for the sale of two separate specific lots within that recorded subdivision. One such contract was with Edward Thomas and Angela Thomas (Thomases); the second was with William Sipple and Geraldine Sipple (Sipples). The Thomases and the Sipples sometimes collectively will be referred to herein as “home buyers.”

In each instance developers agreed for a stated sum to construct a dwelling upon the respective lots for the Thomases and the Sipples. The contracts provided that the dwellings were “to be built in accordance with plans and specifications on file with Anne Arundel County and in the offices of Crown Realty Development, and similar to sample house, the Crown Jamaican — “Type A,” located at 7947 Elvaton Road, Glen Burnie.” Settlement dates in September, 1972 were set in the contracts, but time was not of the essence and extensions without a fixed time limitation had been agreed upon among the parties. In July, 1973, however, developers declined to go forward with construction and tendered the return of the down payments made by appellees. Developers’ basis for declining to go forward was that “* * * the sub-surface conditions of the lot[s] render it impossible to construct any dwelling in accordance with the plans and specifications agreed upon. There is a silty sand base above a hard clay sub-stratum and, between the two levels, a vast pool of water, creating a water table only slightly below the surface of the lot[s] involved. We did not know about such conditions at the time of the * * * contracts] * * *.” Home buyers rejected the tender and filed separate bills for specific performance of their contracts. The actions were consolidated and tried together. The chancellor denied specific performance because he found that it was “* * * likely that a decree of specific performance would require such extended supervision and continuing resolution of disputes as to outweigh the benefits to be gained.” The chancellor decided to award monetary damages to the home buyers as alternative relief. A decree was passed entering judgment in favor of the Thomases for $11,350.00 and in favor of the Sipples for $10,600.00. Developers and home buyers have appealed. Developers seek reversal and dismissal of the bills of complaint. Home buyers seek reversal as to damages only.

Developers’ Appeal

Developers thus state the questions presented by their appeal:

1. Did the chancellor have any right to decree specific performance or to award monetary damages? (Equity Jurisdiction)

2. Were they relieved of going on with the contracts? (Rescission or Breach)

3. What is the date of breach, if any, for computation of damages? (Date of Breach)

1. Equity Jurisdiction

Developers argue that there was no equitable jurisdiction because: (a) a building contract will not be specifically enforced; (b) when the court denied specific performance, general equity jurisdiction was otherwise lacking; and (c) the home buyers were not ready, willing, able and eager to perform.

(a) Enforcement of a building contract

The general rule and an exception are thus stated in Pomeroy’s Specific Performance of Contracts, (3d Ed. 1926) § 23, at 61, et seq

“The general rule is now well settled that, on account of the great difficulty and often impossibility attending a judicial superintendence and execution of the performance, contracts for the erection or repair of buildings, the construction of works, and the conduct of operations requiring time, special knowledge, skill, and personal oversight, will not be specifically enforced. Notwithstanding this general rule and the cogent reason which supports it, there are certain exceptions; and contracts for building or for the construction of works, and the like, falling within them, may be specifically enforced. 1. It has been said that if an agreement for erecting a building is in its nature defined, there is no difficulty in entertaining a suit for its specific performance. But a contract to build a house of a certain value merely, does not come within this description of an agreement sufficiently defined, and will not be enforced. 2. Whether or not the opinion of Ld. Rosslyn is to be regarded as a correct statement of the law, it is settled by the recent English decisions, that where the defendant has contracted to construct some work which is defined on his own land, and where the plaintiff has a material interest in the execution thereof, which is not susceptible of adequate compensation in damages, a specific performance of the undertaking will be compelled.”

It is quite plain that Maryland recognizes the general rule and the cited exception. Ward v. Newbold, 115 Md. 689, 696, 81 A. 793, 795-96 (1911); Brummel v. Realty Co., 146 Md. 56, 64, 125 A. 905, 908 (1924); Edison Realty Co. v. Bauernschub, 191 Md. 451, 457, 62 A. 2d 354, 356-57 (1948), and Laurel Realty Co. v. Himelfarb, 191 Md. 462, 467, 62 A. 2d 263, 265 (1948).

The growth and the extent of the rule and the exception were discussed in Edison Realty Co. v. Bauernschub, supra, where it was said at 457-58 [356-57]:

“In England there was confusion for many years as to how far courts of equity ought to entertain suits for specific performance of a covenant to build or rebuild a house of a specified form and size on particular land. In City of London v. Nash, 3 Atk. 512, 515, Lord Hardwicke recognized the power of the court in this respect, but said that the court should not specifically enforce a covenant to make repairs to a house. The ground of his opinion in that case, which was between a landlord and tenant, was that on the covenant to repair the tenant might have a remedy at law. In some of the later decisions, however, it was held that no covenant to build or rebuild ought to be enforced specifically in equity. It was considered that there could be adequate compensation in damages in a court of law, and a court of equity ought not to undertake to construct a building any more than to make repairs. Lucas v. Comerford, 3 Bro. Ch. 167; Errington v. Aynesly, 2 Bro. Ch. 343. But the English courts finally adopted the rule that they would decree specific performance where the defendant has entered into a contract to construct on his own land work which is clearly defined, and the complainant has a material interest in its performance, and failure to perform is not susceptible of adequate compensation in damages. 2 Story, Equity Jurisprudence, 14th Ed., secs. 1006-1008.

The Court went on to say at 458 [357]:

“So, we hold in this State that where complainants have purchased land improved by an unfinished house and the vendor has installed an insufficient heating apparatus, or has failed to do certain work which he agreed to do, the court of equity has power to decree specific performance, where the work which has not been performed is clearly defined * *

In Daniel v. Kensington Homes, Inc., 232 Md. 1, 192 A. 2d 114 (1963), the Court of Appeals discussed the above cited cases in explicating the rule and the exception, saying at 7 [118]:

“Both Brummel v. Clifton Realty Co., Inc., 146 Md. 56, 125 A. 905, and Edison Realty Co. v. Bauernschub, 191 Md. 451, 62 A. 2d 354, * * * hold that specific performance of a construction contract to complete a house may be decreed, in the discretion of the court, if the work to be done is clearly defined. See also Laurel Realty Co. v. Himelfarb, 191 Md. 462, 62 A. 2d 263. The general rule of equity against specific performance of a contract to build or repair is not absolute and without exception. See Ward v. Newbold, 115 Md. 689, 696, 81 A. 793, where, however, specific performance was denied because of the indefiniteness of the contract.”

In City Stores Company v. Ammerman, 266 F. Supp. 766 (U.S.D.C. for D.C. 1967), affd. 394 F. 2d 950 (1968), it was said at 776-77:

“Some jurisdictions in the United States have opposed granting specific performance of contracts for construction of buildings and other contracts requiring extensive supervision of the court, but the better view, and the one which increasingly is being followed in this country, is that such contracts should be specifically enforced unless the difficulties of supervision outweigh the importance of specific performance to the plaintiff. 5 Willis-ton on Contracts § 1423 (Rev.Ed.1937). This is particularly true where the construction is to be done on land controlled by the defendant, because in that circumstance the plaintiff cannot employ another contractor to do the construction for him at defendant’s expense. In the case at bar, the fact that more than mere construction of a building is involved reinforces the need for specific enforcement of the defendants’ duty to perform their entire contractual obligation to the plaintiff.”

In the subject case title to the land upon which the two houses were to be built was held by the developers. Early on, the Court of Appeals adopted the observation of Story that: “Where, indeed, a contract respecting real property is in its nature and circumstances unobjectionable, it is as much a matter of course for Courts of Equity to decree a specific performance of it, as it is for the Court of Law to give damages for a breach of it.” Smoot v. Rea, 19 Md. 398 (1863).

Application of these principles to the subject contracts persuades us that appellees' bills for specific performance were appropriate actions by them to seek such discretionary equitable relief. In Charles Co. Broadcasting Co. v. Meares, 270 Md. 321, 311 A. 2d 27 (1963), it was said at 324 [30]:

“The granting of specific performance rests within the sound discretion of the trial court, Horst v. Kraft, 247 Md. 455, 459, 231 A. 2d 674, 676 (1967); Restatement of Contracts § 359 (1) (1932). If a contract is fair, reasonable and certain, specific performance may be granted almost as a matter of course, Excel Co. v. Freeman, 252 Md. 242, 246, 250 A. 2d 103, 106 (1969). This is true even if the contract is contingent, if the contingency can be met, Scheffres v. Columbia Realty Co., 244 Md. 270, 284, 223 A. 2d 619, 626 (1966); * * '*”

In the subject case the land was titled in the developers. The home buyers had a material interest in seeking to obtain the home of their choice at the place of their choice. The nature of the performance to be required of the developers was clearly defined — well within the certainty required by the decided cases. See: e.g., Laurel v. Himelfarb, supra; Cohen v. Baltimore County, 229 Md. 519, 185 A. 2d 185 (1962); Edison Realty Co. v. Bauernschub, supra; Kandalis v. Paul Pet Construction Co., 210 Md. 319, 123 A. 2d 345 (1956).

An adequate basis for equitable jurisdiction was shown.

(b) Damages in lieu of specific performance

We regard the case of Charles Co. Broadcasting Co. v. Meares, supra, to be dispositive of the question. In Meares it was said at 325 [30-31]:

“It has long been established that if the remedy of specific performance is possible when the vendee brings suit, but while the action is pending, a vendor disables himself from, performing his contract, damages may be awarded in lieu of specific performance, Busey v. McCurley, 61 Md. 436, 448 (1884); Powell v. Young, 45 Md. 494, 498 (1877); Green v. Drummond, 31 Md. 71, 84 (1869); Rider v. Gray, 10 Md. 282, 300 (1856); 1 Pomeroy, Equity Jurisprudence § 237f, at 443 (5th ed. 1941); Miller, Equity Procedure § 672 (1897); Pomeroy, Specific Performance of Contracts § 294, at 372 (2d ed. 1897). See Kappelman v. Bowie, 201 Md. 86, 90, 93 A. 2d 266, 268 (1952) (‘equity may refuse ... to . . . enforce a hard bargain').
“If a complainant files a bill for specific performance at a time when he knows specific performance is impossible, and the sole remaining prayer for relief is for damages, his bill will be dismissed, Davis v. Winter, 168 Md. 613, 618-19, 178 A. 604, 605-06 (1935). Although specific performance cannot be decreed once performance has become impossible, Powichrowski v. Sicinski, 139 Md. 376, 383, 114 A. 899, 901-02 (1921), damages may be awarded in the same equitable proceeding, Restatement of Contracts, supra, § 363 and illustration 1 at 657, provided that at the time the action was commenced in equity, specific performance was in fact obtainable, Harris v. Harris, 213 Md. 592, 597, 132 A. 2d 597, 600 (1957).” (Emphasis added)

Here, specific performance was not impossible when suit was brought. Indeed, the chancellor, in refusing specific performance, pointed out “that the model home which would serve as a standard for comparative purposes during construction, has been sold and is occupied by a family who is not a party to the suit. * * * the Court knows of no compulsory process to compel that family to submit to frequent interruptions for the purpose of checking ongoing construction.” Significantly, that sample house was sold by the developers more than six months after the bills for specific performance were filed.

The equity court had jurisdiction to grant damages in lieu of specific performance.

(c) Readiness of home buyers to perform The chancellor found that “the evidence shows that the plaintiffs were ready and willing to perform the contracts and frequently inquired as to when their houses would be built.” Our examination of the record demonstrates that there was ample evidence to support the chancellor’s stated conclusion. We cannot say that he was clearly erroneous. Rule 1086.

2. Rescission or Breach

Developers contend that they were entitled to be relieved of responsibility under the contracts with home buyers by reason of the presence of a high water table below the surface of the lots. They claim that the equities are such that home buyers should not be permitted to enforce their contracts. Disclaiming any knowledge of sub-surface water conditions at the time of the execution of the contracts, developers maintain “it was not possible to construct any dwelling in accordance with the plans and specifications agreed upon and substantial redesign was required” and that “the cost of the extra work and material * * * approximates $5,000.00.”

Developers rely upon Linz v. Schuck, 106 Md. 220, 67 A. 286 (1907); Evergreen Amusement Corp. v. Milstead, 206 Md. 610, 112 A. 2d 901 (1954), and Dowling v. Bruffey, 266 Md. 77, 291 A. 2d 471 (1972). Their reliance is misplaced. Linz was a case that may properly be said to have involved a contract terminated by implied mutual rescission, as is demonstrated by the following language in the Court’s opinion:

“We are, however, of the opinion that this prayer can be sustained on the ground stated in King v. Duluth, etc., Ry. Co., supra, and other cases, which is, as expressed in that case, that ‘by the voluntary and mutual promises of the parties their respective rights and obligations under the original contract are waived, and those of the new or modified contract substituted for them.’ When there is such a strong moral obligation as there was in this case to give the appellee relief, it would be making an exceedingly technical distinction to hold that the promise would have been binding if the original contract had been expressly rescinded, but that is not binding because there was no express or actual rescission, although the facts show that it was undoubtedly intended by the parties that neither should be held to the terms of the original contract. ”(at 232 [289]) (Emphasis supplied)

In Evergreen, where “the owner and contractor both thought it to be a solid fact that the cuts and fills would balance” and the contract provided, inter alia, “no additional [fill] material will be substituted for unsuitable material [found] on the site” the Court of Appeals said at 615-16 [903], “Certainly the discovery that outside fill dirt to the value of thousands of dollars — more than the whole of the original contract cost — would be needed to reach grade, was not only evidence of mutual mistake but of revelation of unforeseen difficulty.” (Emphasis added) In Dowling, the contract specifications had provided, inter alia: “Excavation: bearing soil, type — undisturbed earth.” In the light of that language in the contract, the Court of Appeals said at 81 [473]: “The trial court, which tried the case without a jury, found as a fact that the parties had agreed that the contractor should perform ‘extraordinary work’ not covered by the contract. We cannot say that this finding was clearly erroneous.”

In the subject case there was testimony tending to show (a) that the sub-surface water conditions reasonably could have been foreseen and (b) that the homes could have been constructed upon the lots at an additional cost of about $5,000.00.

The testimony of Lowell R. Glazer, President of one of the appellant corporations and the acknowledged agent for all others associated in the general development of the Southgate subdivision, included the following:

“Q Well, the question is isn’t the reason that you have refused to build the Thomas’ and the Sipples’ house because of the fact that the water table extends through all of the adjacent lots which are unbuilt at the present time.

A Yes.

Q So that you aren’t talking about the expense of making Mr. Thomas’ house and Mr. Sipple’s house satisfactory in the light of this condition. You’re talking about the expense of clearing the condition in the entire area.

A Yes.

Q All right, and isn’t it also true that if Mr. Thomas and Mr. Sipple’s houses happen to be on the last two unbuilt lots in the subdivision, you would in fact proceed to build them, wouldn’t you?

A Yes.”

There was, in sum, substantial evidence that the subsurface water condition affecting the lots in question reasonably should have been known to the appellants and the construction could have proceeded without extraordinary cost. In such circumstances we find the language used in Hill Co. v. Pallottine Fathers, 220 Md. 526, 534, 154 A. 2d 821, 825 (1959), to be particularly applicable here:

“* * * we think the mistake in the instant case only went to the commercial possibilities of exploiting the tract in question, a risk which was fairly within the contemplation of the parties and within the realm of bargain.”

We regard the subject case as falling within the rule succinctly stated in Brohawn v. Transamerica Insurance Co., 276 Md. 396, 410, 347 A. 2d 842, 851 (1975):

“The fact that the promised performance of a contractual obligation may be more difficult than was expected at the time the promise was made does not discharge the promissor from his duty to perform.”

Appellants were not entitled to be relieved of their contractual obligations.

3. The Date of Breach

The chancellor found, with substantial record support, that breach by developers occurred in July, 1973. We cannot say that this conclusion was clearly erroneous. Rule 1086.

As will be developed in our discussion of the home buyers’ appeal, this does not necessarily dispose of the issue of damages.

Home Buyers’ Appeal

The trial judge in his written opinion declared:

“The general rule regarding measurement of damages for breach by the vendor under a contract for the sale of real estate is the difference between the contract price and the market value of the property as of the date of breach.”

He cited Cannell v. M’Clean, 6 H & J 297, and other cases as supporting the stated rule. He then applied that rule to the determined date of breach and adopted the opinion of the expert witness Benedict Frederick, that the dwellings, if completed at the time of breach would have a market value of $39,600.00 (Thomases); and $38,000.00 (Sipples). From that premise he deducted the contract price from the market value and added the $1,000.00 deposit that had been paid by each of the home buyers. That calculation produced the sums for which judgments were extended; i.e. for the Thomases for $11,350.00 and for the Sipples for $10,600.00.

On appeal, home buyers contend that the trial judge should have determined the market value as of December, 1973 (then valued by the witness Frederick at $42,000.00 as to the Thomases, and at $40,600.00 as to the Sipples). They argue, accordingly, that judgments should have been extended in the amounts of $13,750.00 and $13,200.00, respectively.

The home buyers’ contention, plausible but not persuasive, is that the circumstances are such that we should apply a damage doctrine akin to that applicable to certain actions at law brought after anticipatory breach of contract.

That doctrine is tersely, but for present purposes adequately, stated in 22 Am. Jur. 2d Damages, § 48 (1965) as follows:

“Where, before the time for performance, a contract is repudiated by one party thereto, the other party has the right and choice of awaiting the time for performance and then holding the other party responsible for all the consequences of nonperformance, and he may then bring an action for breach of contract, if the repudiation has not been withdrawn effectively before that time.” (Emphasis added)

Home buyers maintain that the filing of bills for specific performance (rather than actions at law) demonstrated that they desired performance of their contracts. They argue that this circumstance legally is the equivalent “of awaiting the time for performance and then holding the other party responsible for all the consequences of nonperformance.”

Assuming, arguendo, that damages in lieu of specific performance may in some instances be calculated as of the date of performance rather than the date of breach, we are persuaded that this is not such a case. In the subject case the only date for performance stated in the contract was a date that actually preceded the breach. Home buyers, however would have us fix a performance date for the indeterminate contractual extension of the time of completion. They suggest that this date should be calculated by adding to the date of breach a period of time equal to the period of time between execution of the contract and the proposed date initially provided for completion under it. We decline to do so.

Home buyers themselves willingly submitted to an indeterminate extension of the date for developers’ performance and thus made the date of ultimate completion uncertain rather than fixed. Under such circumstances we are persuaded that the rule (adopted by the trial judge) as declared in Cannell v. M’Clean, supra, at 301-02, is apposite here:

“* * * the rule, that the value at the time of the breach of contract, (whether increased or diminished,) shall be the measure of damages, can in general be productive of injury to neither party. If there should be an increase in value, the purchaser, being entitled to the thing itself, there is no injury or hardship imposed upon the vendor, (if he will withhold it in violation of his contract,) in compelling him to pay the value of it, and not permitting him to discharge himself from his engagement, by returning only the consideration paid, and pocketing the difference himself against right; and on the contrary, if there be a diminution in value, no injury is done to the purchaser, in not permitting him to recover more than such diminished value; since if the contract had been fulfilled, he would have had the property subject to that deterioration, and the restricting his recovery to the diminished value, places him only in the predicament in which he would have stood if the contract had not been broken. But if he should be suffered to resort to the amount of the consideration as the measure of damages, it would work a hardship upon the defendant, the subject of whose engagement was the land or thing only, such as it might be at the time stipulated for conveyance or delivery, without regard to what should be the then value, which did not at all enter into the contract. The safest rule therefore, and one which is hpst calculated to promote justice, is that the value at the time of the breach of contract shall be the measure of damages.”

The validity of application of that principle to the subject case has not been diminished by the passage of time or the march of events.

Judgments affirmed.

Appellants and cross appellees to pay three-fourths of the costs, appellees and cross appellants to pay one-fourth thereof

      . The contract price of land and dwelling as to the Thomases was $29,250.00, with the lot included therein evaluated at $5600.00, and called for, by way of extras, “fireplace in basement and #700 Series Windows.” The contract price for land and dwelling as to the Sipples was $28,400.00, with the lot included therein evaluated at $5300.00.


source: Caselaw Access Project

author: Moore, J.,

license: Public Domain

text:
    A. A. MUELLER et al. v. MARSHALL PAYN
    [No. 446,
    September Term, 1975.]

      Decided February 27, 1976.

      The cause was argued before Thompson, Moore, Lowe and Mason, JJ.

      David E. Manoogian, with whom were MacDonald & Manoogian on the brief, for appellants.
    No appearance by appellee.
   Moore, J.,

delivered the opinion of the Court.

This appeal presents the issues of whether a default judgment entered in Missouri against Maryland defendants was entitled to full faith and credit in Maryland and, if so, whether summary judgment was properly entered for appellee in a suit upon the judgment in the Circuit Court for Prince George’s County.

I

Marshall Payn, appellee, a resident of St. Joseph, Missouri, filed a declaration in the Circuit Court for Prince George’s County on November 20, 1974, seeking recovery of the sum of $12,000, plus costs, against A. A. Mueller and National Technical Institute, appellants, of College Park, Maryland. Payn attached to his declaration an exemplified copy of a judgment in that amount rendered on May 31, 1974 by the Circuit Court of Jackson County, Missouri, at Independence, Missouri, against both appellants. (The Missouri judgment recited that the appellants “although duly and lawfully summoned,” were in default.) The declaration was accompanied by a motion for summary judgment without a supporting affidavit.

Appellants by their counsel thereafter filed separate but identical pleas interposing the general issue and pleading specially, inter alia, that the Missouri court lacked personal and subject matter jurisdiction, that the foreign judgment was obtained by fraud and that the appellants in the Missouri proceedings did not receive notice thereof in sufficient time to defend, that the Missouri judgment was invalid because “of errors and irregularities and that appellants had not been served with process in the Missouri action.” Appellants also made a demand for a jury trial and filed, without supporting affidavit, a motion to extend the time to oppose appellee’s motion for summary judgment. Without a hearing, the lower court (Mathias, J.) entered an order on January 28, 1975 that neither party was entitled to summary judgment, citing Maryland Rule 610 a 3.

Thereafter, on March 18, 1975, Mr. Payn again filed a motion for summary judgment annexing thereto an authenticated copy of the entire record of the proceedings in the Missouri court. The Missouri record included copies of the following:

1) Petition for Damages filed on May 24, 1973 against both appellants. The petition alleged that on or about August 25, 1972 the parties had entered into a written contract whereby the plaintiff-appellee agreed to furnish the defendant technical and consulting services in establishing and operating a private school business in the field of motorcycle technology for which he was to receive the sum of $12,000, and that the said amount had not been paid.
2) An affidavit filed with the Petition for Damages requesting foreign personal service as provided by Section 506.500 of the Revised Statutes of Missouri 1949, the long-arm statute, the defendants being non-residents of the State of Missouri.
3) Copy of communication dated August 25,1972 to Marshall V. Payn, St. Joseph, Missouri, confirming agreement between National Technical Institute and Marshall Payn as an individual “to act as a consultant and to render services as necessary for the motorcycle technology that National Technical Institute offers. Payment. . . will commence April, 1973 and will be for $1,000.00 per month for a period of 12 months.” This communication was signed by “A. A. Mueller, President, N.T.I.”
4) A return of service by Deputy Sheriff James Ephraim of Prince George’s County, Maryland, showing service upon National Technical Institute with service on A. A. Mueller, President, executed on September 25, 1973; and a separate return of service executed on September 25, 1973 upon appellant, A. A. Mueller.
5) Letter dated October 8, 1973 on the letterhead of National Technical Institute, College Park, Maryland, to the Clerk of the Circuit Court of Jackson County, Independence, Missouri, signed by A. A. Mueller and requesting that an attached letter be filed “as a reply to the Petition of Damages in the case of Marshall Payn against A. A. Mueller.” (Carbon copies of this communication were indicated to have been sent to the Deputy Clerk and to counsel for Marshall Payn.)
6) Letter dated October 8, 1973 (referred to in Item 5, supra) on letterhead of National Technical Institute, College Park, Maryland, signed by A. A. Mueller, addressed to the Clerk of Court in Missouri. The communication requested particulars of the claim and stated that “N.T.I. will counter-sue for the $3,000 plus other damages resulting to its business from Mr. Payn’s consulting services.” (Copies were also sent to the Deputy Clerk and to counsel for Mr. Payn.)
7) Motion by attorney for Payn in the Missouri proceedings “requesting order for proper answer on the alternative that the plaintiff be granted a default judgment.” The motion recited the filing of the Petition for Damages followed by Mr. Mueller’s two letters dated October 8, 1973 and alleged that “said letters are insufficient to constitute answer to the plaintiffs petition under the laws of the State of Missouri and under the Rules of civil procedure heretofore adopted by the Supreme Court of the State of Missouri. The motion contained a Certificate of Service by mail to A. A. Mueller and National Technical Institute dated January 2,1974.
8) Formal order by the Circuit Court of Missouri, 16th Judicial Circuit, dated January 2, 1974, that the defendants (appellants here) within sixty days “file their proper answer to the plaintiff’s petition or, in the alternative, plaintiff be granted a default judgment against the defendant.”
9) Judgment rendered by the Circuit Court of Jackson County, Missouri on May 31, 1974 in favor of Marshall Payn against A. A. Mueller and National Technical Institute in the sum of $12,000 and costs because of defendants’ default although “timely and lawfully summoned.”

Appellants responded to Payn’s motion for summary judgment in the proceedings below by filing an opposition thereto and by interposing their own motion for summary judgment. As grounds for their opposition, appellants asserted (a) that Payn's previously filed motion for summary judgment had been denied on January 29, 1975; and (b) that Payn had filed no new information in support of the second motion for summary judgment.

Mueller’s and National Technical Institute’s motion for summary judgment was based solely upon a claim that “the Missouri judgment was not obtained in compliance with Missouri law.” Annexed to their motion was an affidavit by David H. Jeter, a member of the Bar of the State of Missouri, in which the affiant stated that Missouri Supreme Court Rule 44.01 (d) requires:

“A written motion, other than one which may he heard ex parte, and notice of the hearing thereof, shall be served not later than five (5) days before the time specified for the hearing, unless a different period is affixed by law or court rule or by order of the court. . .” (Emphasis added.)

Attorney Jeter further deposed that the court file in Missouri did not reflect that any notice of hearing was given to Mueller and National Technical Institute in the granting of the order dated January 2, 1975, supra, requiring the defendants in the Missouri action to file a proper answer “on the alternative” that the plaintiff be granted a default judgment.

Appellee Payn thereafter filed an opposition to appellants’ motion for summary judgment in which it was stated that the second motion for summary judgment included the entire proceedings in the Missouri court (which had not been filed with the first motion for summary judgment) and that the official proceedings showed that the Missouri judgment against both Mueller and National Technical Institute was valid.

Prior to any hearing on the respective motions for summary judgment, appellants served a notice of the taking of the deposition of Marshall Payn, scheduled for April 28, 1975 at College Park, Maryland. (Notices had previously been given of the taking of his deposition on March 21 and April 4 but, for reasons not disclosed in the record, the deposition of Payn was not taken on either date.) Upon application of Payn’s Maryland counsel, a protective order was granted by the Circuit Court for Prince George’s County (Powers, J.) in which was ordered that the scheduled deposition of Mr. Payn be postponed, if necessary, to a date after the summary judgment motions of both parties had been ruled upon. It was further ordered that the deposition, if any, be taken in Missouri at the expense of Mueller and National Technical Institute.

A hearing in open court on the parties’ respective summary judgment motions was held on May 1, 1975 before Judge Powers. Payn’s motion for summary judgment was granted and, on May 5, 1975, the court signed a formal order that judgment be entered in favor of the appellee in the sum of $12,000 plus costs. It was further ordered, however, that the execution on the judgment be stayed for a period of forty-five days. As the transcript of the proceedings before Judge Powers discloses, counsel for appellants advised the court that a motion to set aside the Missouri judgment had recently been filed and that a stay of execution on the judgment was desired in order that appellants could pursue their available remedies in the State of Missouri. We assume from the record that appellants’ recourse to the Missouri court did not meet with success because they subsequently posted a supersedeas bond in the amount of $14,000.

We proceed to consider the assignments of error.

II

Appellants’ first principal contention is that the Missouri judgment is not entitled to full faith and credit in Maryland for the reasons that the Missouri judgment

(a) Was not valid because it was not in compliance with Missouri’s Supreme Court Rule 44.01 and because the court ignored the letters of defendants dated October '8, 1973;

(b) Is not conclusive in Maryland if obtained by fraud; and

(c) Should not be recognized because the “foreign court” was a seriously inconvenient forum within the meaning of the Maryland Uniform Foreign Money-Judgment Recognition Act, Md. Code Annot., Courts and Judicial Pro., Sec. 10-704 (b) (5) (1975).

First, we hold that the Foreign Money-Judgment Recognition Act has no bearing whatever. As Section 10-701 (c) specifically provides, a “foreign state” means “any governmental unit other than the United States, or any state, district, commonwealth, territory, insular possession thereof, or the Panama Canal Zone, the Trust Territory of the Pacific Islands or the Ryukyu Islands.” The act applies only to judgments of countries outside the United States, its territories and possessions. See generally, Patterson, C. H., Foreign Country Judgments and the Second Restatement of Conflict of Laws; 72 Columbia L. Rev. 220, 264 (1972); 47 Am. Jur. 2d Judgments, Sec. 1242. Accordingly, we disregard so much of appellants’ claims of error in (b) and (c) above as are based upon the Uniform Act.

Next, we observe that appellants make no contention that the Missouri court lacked jurisdiction of the subject matter or of the parties. In this connection, we note that personal service in Maryland of both appellants was effected, as previously stated, pursuant to the provisions of Section 506.500, Revised Statute of Missouri 1949, Missouri’s Long-Arm Statute. Furthermore, any defect of personal jurisdiction in the initiation of the action was effectively waived by the letters which appellants addressed to the Clerk of the Circuit Court of Jackson County, Missouri dated October 8,1973, requesting that they be filed as an answer to the petition for damages in the action against them by appellee. These communications clearly constituted a general appearance in the Missouri action by both appellants. See, Thomas v. Marshall, 29 Md. App. 299, 347 A. 2d 862 (1975).

The leading case in Maryland concerning full faith and credit requirements under the Federal Constitution is Coane v. Girard Trust Co., 182 Md. 577, 35 A. 2d 449 (1944) where Judge Delaplaine stated for the Court:

“If the judgment has been rendered by a court of competent jurisdiction, the full faith and credit clause of the Federal Constitution precludes any inquiry into the merits of the cause of action, the logic or consistency of the decision, or the validity of the legal principles involved, and the judgment is conclusive as to all questions in controversy and all defenses which might have been interposed with proper diligence.” 182 Md. at 580.

Appellants’ contentions that the lower court improperly granted the Missouri judgment full faith and credit come to rest upon two prongs — alleged noncompliance with Missouri Rule 44.01 (d) and alleged fraud.

We find no basis for either contention. The Missouri Rule does not sustain the argument that five days notice was required before the entry of the order requiring a “proper answer.” Payn’s motion “for a proper answer” or that he be granted a default judgment was granted the day it was filed. We consider the action of the court entirely proper and in accordance with Rule 44.01 (d) which makes specific exception for motions which may be heard ex parte. The motion for a proper answer was precisely within that category. There is no suggestion that appellants did not receive notice of the motion and order. In granting the motion, the court allowed appellants sixty days within which to “file their proper answer” or suffer a default judgment; and, indeed, more than 120 days elapsed before the Circuit Court in Missouri finally awarded Mr. Payn a default judgment. We regard as specious the claim of appellants that having answered, by their letters dated October 8,1973, they were entitled to a trial.

The fact of the matter is that appellants were accorded every opportunity to comply with Missouri rules relating to the defense of claims but failed to do so. Nothing here involved was in any way irregular nor, indeed, repugnant to our own law. Here, failure to plead timely after service of process may lead to the entry of judgment by default without hearing and without further notice. Berwyn Fuel & Feed Co. v. Kolb, 249 Md. 475, 240 A. 2d 239 (1968); Maryland Rules 310 b and 610 c 3. No Missouri statute or rule has been presented by appellants or discovered by this Court which would require any notice to appellants beyond that contained in the order dated January 2, 1974 requiring them to file a proper answer or be subjected to a default judgment.

Even if a violation of Missouri’s procedural rules occurred, however, it is doubtful that such a violation would require a denial of full faith and credit. Restatement [2d] Conflict of Laws, Sec. 106; Combs v. Chambers, 302 F. Supp. 194 (N.D. Okla. 1969). In Combs, the Court held that even if a rule in the state where judgment was rendered required notice before a default judgment could be taken, the taking of such a judgment without notice would not negate the requirements of full faith and credit. The Court stated:

“[T]he judgment of an Arkansas court should be entered in Oklahoma unless the Arkansas court lacked jurisdiction to enter the same. . . . [T]he court has determined that the Defendant . . . had notice of the Arkansas suit against him by . . . registered mail notice to him. The Arkansas court, thus, had jurisdiction. ... If it may be assumed that Arkansas by statute or rule of court required notice before a default judgment can be taken and a default judgment is taken without such notice, such action does not constitute a lack of jurisdiction in the meaning of the full faith and credit clause. . . . It is at most an irregularity, the judgment is not void and should be entered in a sister state.” At 200.

The Restatement, Conflict of Laws [2d], supra, emphasizes that the correction of a judgment of another state should be obtained by appropriate action in the state of rendition. Thus, Comment “a” to Sec. 106, supra, states in part:

“(a) [A] party who is aggrieved by the judgment must seek correction of the error in the state of rendition by having the judgment vacated or reversed on appeal. The judgment will not be denied recognition and enforcement in other states because of such an error.
Illustration:
(1) A sues B in state X on an alleged contract. The court finds the contract to exist and gives judgment for A. A sues B in state Y on the judgment. The Y court will give judgment for A even if it believes that the X court was mistaken in its finding.” (Emphasis added.)

With respect to the appellants’ claim of fraud, we observe that the particulars set forth in their brief are dehors the record and that the only reference to fraud in the proceedings below on the part of the appellants was the general allegation in their respective pleas that the “foreign judgment was obtained by fraud.” No particulars of alleged fraud were set forth in appellants’ own motion for summary judgment nor in their opposition to appellee’s second motion for summary judgment. There is a serious question as to whether or not the question has been preserved for appellate review. Rule 1085.

At all events, we glean from appellants’ brief that any fraud involved related to the formation of the contract itself and not to the obtaining of the judgment. To the extent that appellant relies upon Section 10-704 (a) (4) of the Uniform Foreign Money-Judgment Act such reliance is, as shown supra, totally misplaced. Furthermore, the type of fraud which may result in a denial of full faith and credit is generally characterized as “extrinsic” and amounts to a fraud on the court, as where the fraud goes to the question of jurisdiction, Staedler v. Staedler, 78 A. 24 896, 901 (N.J. 1951); Klaiber v. Frank, 86 A. 2d 679, 683 (N.J. 1952), or prevents the defeated party from fully and fairly presenting his case, Britton v. Gannon, 285 P. 2d 407 (Okla. 1955). Fraud such as that indicated here, concerning the merits of the action, must be raised in the court where the judgment is rendered. Such “intrinsic” fraud, even if proven, does not permit denial of full faith and credit. Oldham v. McRoberts, 258 N.Y.S.2d 424, (Ct. of Appeals 1965); Perkins v. Benguet Consol. Mining Co., 132 P. 2d 70 (Cal. App. 1942), cert. denied, 319 U. S. 774 (1943). As stated by Vice-Chancellor Haneman in Second National Bank of Philadelphia v. Thompson, 56 A. 2d 492, 496 (N.J. Eq. 1947):

“Fraud, to be available as a defense against an action on a foreign judgment, must be extrinsic fraud. It must be a fraud in the procurement of the judgment rather than a fraud attendant upon the cause of action itself.
“The judgment cannot be impeached for any supposed defect or irregularity in the transaction upon which it was founded.”

This distinction between extrinsic and intrinsic fraud is firmly embedded in Maryland law. As Judge Digges stated for the Court of Appeals in Schwartz v. Merchants Mortgage Company, 272 Md. 305, 309, 322 A. 2d 544 (1974):

“This ‘intrinsic-extrinsic’ distinction, which is delineated for this State in Maryland Steel Co. v. Marney, supra, [91 Md. 360, 46 A. 1077 (1900)] has been universally followed by the large number of Maryland cases which have considered whether an enrolled decree or judgment should be reopened when fraud is alleged. (Citations omitted.) These cases establish that fraud is extrinsic when it actually prevents an adversarial trial, but is intrinsic when it is employed during the course of the hearing which provides the forum for the truth to appear, albeit that truth was distorted by the complained of fraud.” (Emphasis added.)

See also Gotham Hotels, Ltd. v. Owl Club, Inc. of Baltimore, 26 Md. App. 158, 337 A. 2d 117 (1975).

Here, appellants would apparently have the Maryland courts examine Payn’s representations concerning his expertise in the field of motorcycle technology which led to the contract of employment upon which the Missouri judgment was based. Missouri was the proper forum for any such defense. Appellants had notice of the Missouri proceedings. They chose to file no proper answer there between January 2 and May 31,1974. They do not allege that the jurisdiction of the Jackson County court was fraudulently acquired. The Missouri judgment is therefore entitled to full faith and credit in Maryland.

Appellants also claim that the motion for summary judgment which was granted constituted merely the renewal of a motion for summary judgment that had been previously denied, and is not valid. Under Maryland Rule 610 a motion “for summary judgment may be made by a party at any time.” We must reject appellants’ argument that the language of the rule implicitly proscribes more than one such motion. The second motion in this case was, as previously pointed out, accompanied by the complete record from the Missouri court, whereas the first motion relied only upon an exemplified copy of the Missouri judgment. The first motion was deficient and was correctly denied. See, Maryland Code Annot., Courts and Judicial Proceedings, Sec. 10-601 (1974) and Coane v. Girard Trust Company, supra. Mr. Payn was clearly entitled to the renewal of the motion, previously denied. As Judge Powers pointed out, he was not here presented with an “appeal” at the nisi prius level of the denial of a motion for summary judgment by another trial judge.

Finally, we perceive no abuse of discretion on the part of Judge Powers in granting a protective order pursuant to Rule 406, postponing the taking of Mr. Payn’s deposition in Maryland until after the hearing on the motion for summary judgment, “if necessary.” Appellants complain in their brief that this action by the court hampered them in connection with their claim of fraud. We have heretofore disposed of this aspect of the appeal and, under the circumstances, can only conclude that Judge Powers was entirely correct in granting the order to protect.

Judgment affirmed; appellants to pay the costs.

      . The requirements of the Rule with respect to the filing of affidavits had not been complied with.

      . The Missouri Long-Arm Statute is similar to the Maryland Statute. Courts and Judicial Proceedings Article, Sec. 6-103.

      . Missouri Rule 55.09 requires that “[a] party shall state in short and plain terms his defenses to each claim asserted and shall admit or deny the averments upon which the adverse party relies.”

      . Reliance was not placed upon any of the other defenses asserted in their respective pleas to the Petition for Damages.

      ; The written agreement with Mr. Payn was not signed by Mr. Mueller individually but in his capacity as President of National Technical Institute. Therefore his individual liability should have been disclaimed by timely action in the Missouri proceedings.'

      . Missouri Rules 74.045 and 74.10 provide for the award, where the defendant fails to file his answer, of an interlocutory default judgment; a determination of damages by a jury or, as here, the court; and the entry of final judgment. Rule 74.12 provides that persons not summoned personally may petition for review of such final judgment but Rule 74.15 makes it clear that persons personally summoned may not petition for review.

      . Judge Mathias, who denied t’.e original motion, signed the order setting down the subsequent motions for summary judgment for hearing.


author: Mason, J.,

text:
    JAMES ALPHONZO DELLY v. STATE OF MARYLAND
    [No. 458,
    September Term, 1975.]

      Decided March 1, 1976.

    The cause was argued before Moore, Lowe and Mason, JJ.

      Gerald A. Kroop for appellant.

      Gilbert Rosenthal, Assistant Attorney General, with whom were Francis B. Burch, Attorney General, William A. Swisher, State’s Attorney for Baltimore City, and Steven G. Hildenbrand, Assistant State’s Attorney for Baltimore City, on the brief, for appellee.
   Mason, J.,

delivered the opinion of the Court.

The appellant, James Alphonzo Delly, was convicted at a bench trial in the Criminal Court of Baltimore of the crime of possession of heroin with intent to distribute. He was sentenced to a term of seven years.

The appellant’s only assignment of error is that the evidence was obtained as a result of an unreasonable search and seizure carried out under an illegal general warrant.

On August 31, 1974, police officers armed with a search warrant entered the premises of 831 Whitelock Street in Baltimore City. In looking for the appellant, the officers broke into two unoccupied rooms on the second floor of the building prior to breaking into the third room where the appellant and sixty-five bags of heroin were found. After locating the appellant, the officers also broke into two unoccupied rooms on the third floor. Nothing was seized or introduced into evidence against the appellant from these unoccupied rooms. It was established at trial that 831 Whitelock Street was a multiple family dwelling and that the owner had authority to rent four rooms, including the one that was rented to the appellant.

The principal thrust of the appellant's argument is that since the premises were a multiple family dwelling, the search and seizure were illegal “because the warrant did not describe the place to be searched with that particularity, required by the Fourth Amendment”. The appellant further argues that before obtaining or executing the warrant, the police had a duty to check with the proper authorities to determine whether the house was a single or multiple family dwelling. To support this novel proposition, the appellant relies solely on the case of United States v. Santore, 290 F. 2d 51 (2d Cir. 1960) cert. denied, 365 U. S. 834 (1961). In that case, a warrant was issued authorizing the search of a house which appeared from the outside to be a single family dwelling. In executing the warrant, however, it was discovered that the house contained two or more separate family units. In upholding the validity of the warrant, the Court made the following observations:

The house at 164 Hill Street is to all outward appearances a one-family house with a front door and a side door, and it had always been registered with the local authorities as a one-family dwelling. A few years prior to the search the interior of the house was renovated and subdivided by Orlando, but, in contravention of local ordinances, no permission to do so was obtained from the proper authorities. Consequently no notice of this subdivision was ever given to the local officials. Id., 67.

Unlike the appellant, we do not read this statement to mean that before a police officer obtains or executes a search warrant for a house which appears to be a single family dwelling, he must first check with local authorities to make sure the premises are not a multiple family dwelling. We know of no authority mandating such an onerous and burdensome requirement, nor are we inclined to impose one.

To satisfy the requirements of the fourth amendment to the Federal Constitution in obtaining and executing a warrant to search a multiple family unit, the case of United States v. Hinton, 219 F. 2d 324, 325-326 (7th Cir. 1955) enunciates the following rule:

For the purpose of satisfying the Fourth Amendment, searching two or more apartments in the same building is no different than searching two or more completely separate houses. Probable cause must be shown for searching each house or, in this case, each apartment.

An exception to this requirement occurs where the multiple unit character of the premises is not externally apparent and is not known to the officer applying for or executing the warrant. Owens v. Scafati, 273 F. Supp. 428 (D. Mass. 1967), cert. denied, 391 U. S. 969 (1968); State v. Chisholm, 499 P. 2d 81 (Wash. 1972); State v. Koberstein, 493 P. 2d 176 (Ore. 1972); State v. Aiello, 221 A. 2d 40 (N.J. 1966). Annot., 11 A.L.R.3d 1330 (1967).

There is no formula which can be used to measure the particularity with which premises must be described in a search warrant. The adequacy of such description in every case necessarily depends on the facts and circumstances there present. Frey v. State, 3 Md. App. 38, 46, 237 A. 2d 774, 780 (1968). Ordinarily the description in a warrant of a house to be searched is sufficiently defined if it correctly states the street number of the house. Saunders v. State, 199 Md. 568, 572, 87 A. 2d 618, 620 (1952); cf. Ferguson v. State, 236 Md. 148, 202 A. 2d 758 (1964). In the present case, the outward appearance of 831 Whitelock Street gave no indication that the dwelling contained more than one family unit. The building had but one doorbell and one mailbox. There was no evidence that the police knew or should have known that more than one family resided in this dwelling. Accordingly, the evidence seized was not the result of an unreasonable search and seizure under an illegal general warrant.

Judgment affirmed.


text:
    DONALD LOUIS MAZOR v. STATE OF MARYLAND, DEPARTMENT OF CORRECTION et al.
    [No. 495,
    September Term, 1975.]

      Decided March 1, 1976.

      The cause was argued before Powers, Menchine and Davidson, JJ.

      Franklin I. Freeman and Wilson K, Barnes for appellant.

      J. Kent Leonnig, Special Assistant Attorney General, with whom were Francis B. Burch, Attorney General and H. George Meredith, Jr., Special Assistant Attorney General on the brief, for appellee Subsequent Injury Fund.

      Charles R. Goldsborough Jr., Special Attorney, with whom were Francis B. Burch, Attorney General and J. Howard Holzer, Special Attorney on the brief, for other appellee, State of Maryland, Department of Correction.
   Menchine, J.,

delivered the opinion of the Court.

Donald Louis Mazor, (claimant) employed by the State of Maryland, Department of Correction as a penitentiary guard, on July 17,1972 was injured in an inmate uprising.

As a result of the injury therein sustained, Mazor applied for and on September 1, 1973 was granted, under the State pension system, pursuant to Maryland Code Article 73B, § 11 (6) and (7), life pension accidental disability benefits of $421.59 monthly.

As a result of that same injury Mazor also filed a claim for workmen’s compensation benefits against the State of Maryland, Employer and State Accident Fund, Insurer (employer and insurer). On October 30, 1974 he was awarded workmen’s compensation benefits by the Workmen’s Compensation Commission (Commission) at the rate of $65.00 per week, not to exceed the sum of $26,000.00, for permanent disability under “other cases” calculated on the basis of 60% industrial loss of use of the body under Maryland Code Article 101, § 36 (4) (a).

Employer and insurer contended that by virtue of the provisions of Maryland Code Article 101, § 33, it was discharged in full from any liability or obligation to pay any benefit under Article 101 because of the life pension provided by the State of Maryland under Article 73B. The Commission found that the pension benefits provided by Article 73B were equal to or better than any weekly benefit the claimant could receive under any type of permanent disability awarded under Article 101. It is manifest, however, that the Commission adopted claimant’s position that the State Accident Fund was not entitled to an offset under Section 33.

Employer and insurer and claimant appealed to the Circuit Court for Baltimore County with the cause thereafter being removed to the Circuit Court for Harford County for trial.

After motion filed in the Circuit Court for Harford County, Judge Close granted summary judgment in favor of the employer and insurer, “Because the Employer has provided benefits [under Article 73B, § 11 (6) and (7)] greater than those possible under Article 101, it is relieved and discharged of any liability or obligation to provide benefits under it [by reason of § 33].”

Claimant on appeal asks us to decide that § 33 of Article 101 has no application to pensioned employees, but is limited in application solely to workmen’s compensation cases where there have been awards of “benefits resulting from the death of an employee.” Claimant recognizes that in Nooe v. Mayor & City Council of Baltimore, 28 Md. App. 348, 345 A. 2d 134 (1975), we considered the precise question here in issue. He asks us to reconsider our holding in Nooe, “* * * that the payment * * * of the pension [providing a benefit equal to or better than any benefit provided for in Article 101] satisfied and discharged in full the liability or obligation of the [employer] for any benefit under the Workmen’s Compensation law.” 28 Md. App. at 356 [139].

We have reviewed and now reaffirm our decision in Nooe. For the reasons stated in Nooe we reiterate that § 33 must be interpreted to apply to cases involving permanent disability and hold that under the circumstances of this case the section must be interpreted as applying to this claimant.

Alternatively, appellant contends that § 33 is unconstitutional under both the State and the United States Constitutions.

The desirability for coordination of the overall system of wage-loss protection and the constitutional issues arising in statutory efforts to achieve it, are discussed in Larson’s Workmen's Compensation Law in the following sections:

“§97.00 Once it is recognized that workmen’s compensation is one unit in an overall system of wage-loss protection, rather than something resembling a recovery in tort or on a private accident policy, the conclusion follows that duplication of benefits from different parts of the system should not ordinarily be allowed. Since most social legislation in the United States has appeared in unrelated fragments, lack of coordination resulting in cumulation of benefits is quite common; but newer legislation is more carefully drawn to prevent this result.
“§97.10 Impropriety of duplicate benefits
Wage-loss legislation is designed to restore to the worker a portion, such as one-half to two-thirds, of wages lost due to the three major causes of wage-loss: physical disability, economic unemployment, and old age. The crucial operative fact is that of wage loss; the cause of the wage loss merely dictates the category of legislation applicable. Now if a workman undergoes a period of wage loss due to all three conditions, it does not follow that he should receive three sets of benefits simultaneously and thereby recover mere than his actual wage. He is experiencing only one wage loss and, in any logical system, should receive only one wage-loss benefit. This conclusion is inevitable, once it is recognized that workmen’s compensation, unemployment compensation, non-occupational sickness and disability insurance, and old age and survivors’ insurance are all parts of a system based upon a common principle. If this is denied, then all coordination becomes impossible and social legislation becomes a grab-bag of assorted unrelated benefits. For example, if workmen’s compensation is thought of as a quasi-tort recovery, there will be a temptation to say that the injured workman should be entitled to keep the entire recovery without reference to any other legislative benefits he may receive for the same wage loss. Again, if non-occupational disability insurance is viewed, as it was for a time in Rhode Island, as essentially equivalent to private health and accident insurance, the argument will be heard that a worker has just as much right to keep both occupational and non-occupational disability benefits as he would have to collect both workmen’s compensation and the proceeds of a private accident policy.
“§97.32 Constitutionality of the offset provision
The constitutionality issue is at this writing before the United States Supreme Court, and consequently the discussion of the point will be confined to a brief account of the state of case law in the lower courts and the principal lines of argument. All but one of the decisions on the constitutional issue in federal district and circuit courts have held the offset constitutional. The case for constitutionality is well expounded in the Sixth Circuit’s opinion in Lofty v. Richardson [440 F. 2d 1144] * * *
The main line of attack in this case was that Congress did not also create an offset for such benefits as private insurance proceeds and recoveries in damage suits. The court reviewed the development of Supreme Court cases establishing a very broad congressional discretion in adopting classifications for legislative purposes. It then examined the legislative history of the offset, stressing that the main purpose was to eliminate the kind of duplication of benefits that in many instances resulted in total benefits exceeding actual previous wage while working. The court set out in full a table ‘purporting to show that continued duplication of benefits under terms of the then pending bill would mean at least some payments in excess of prior average “take home pay” in every state, and up to a maximum of 247% in the instance of Arizona.’ The adverse effect of this situation on incentives to become rehabilitated and to return to work was noted. As to the invidious classification argument, the court adduced three answers. The first was that there had been widespread complaints about double coverage as to compensation and social security, but no such complaints as to the proceeds of private insurance or negligence actions. The second was that administratively it would be relatively simple to enforce the compensation offset, while to calculate and apply a reduction for private insurance and civil damages might offer severe difficulties. The third reason was the most important:
‘Finally, it is entirely conceivable to us that Congress may have considered Social Security benefits and Workmen’s Compensation benefits to be more arguably duplicative of one another than could appropriately be claims concerning Social Security benefits and the other two types of payments. Both Social Security and Workmen’s Compensation are social welfare legislation. Private accident or disability insurance is a private - contract, frequently paid for entirely by the recipient. And, of course, court awards for injuries are private rights derived from the common law involving the principle of compensation for negligence or fault.
Most of the argument for the Workmen’s Compensation offset came from employers who generally pay all of the costs for Workmen’s Compensation and half of the costs of the Social Security benefits. Their argument before Congress was that they were paying twice for the same injury. This argument would have, of course, no merit at all in relation to a damage action award or to the proceeds of privately purchased accident or disability insurance.’ ” [Quotation from Lofty v. Richardson cited in text.]

Lofty v. Richardson, 440 F. 2d 1144 (6th Cir. 1971) dealt with a congressional offset amendment requiring reduction of social security disability benefits when their recipients also are receiving State workmen’s compensation benefits and the combined total of both exceed 80% of the worker’s average wage. The Court rejected the contention that the offset statute’s failure to include benefits derived from private insurance or from civil damage suits produced “an arbitrary and capricious classification which cannot stand when tested against the due process clause” (at 1146). In doing so the Court pointed out that “* * * there is a good deal of case law which serves to illustrate the breadth of legislative power accorded the Congress (or the states) by the Supreme Court’s interpretation of the constitutional limitations contained in the due process and equal protection clauses” (at 1146). See: e.g. Admr., Motor Veh. Adm. v. Vogt, 267 Md. 660, 676, 299 A. 2d 1, 9 (1973), declaring: “* * * a cardinal rule to be observed in determining whether a statute is violative of the Equal Protection Clause is that the legislature exercises a broad scope of discretion in establishing classifications, subject only to the requirement of reasonableness in doing so.”; A & H Transp. Inc. v. Baltimore, 249 Md. 518, 529, 240 A. 2d 601, 606 (1968), declaring, “These [constitutional] limits are not exceeded under the due process clauses of the Maryland and Federal Constitutions unless the party challenging the ordinance can show that it is arbitrary, oppressive or unreasonable.”

Appellant contends, without justification, we think, that the pension provided by Article 73B constitutes a contract that may not be impaired. We find it plain that the pension is a benefit or gratuity provided by the State entirely at its expense. Article 73B, § 1 (17) (1975 Cum. Supp.) defines the word pension as follows:

“ Tension’ shall mean payments for life derived from money provided by the State. All pensions shall be payable in equal monthly installments.”

The statute makes a clear distinction with respect to an annuity resulting from employee contributions.

The last mentioned contention, among others, fades away with the Supreme Court’s decision in Richardson v. Belcher, 404 U. S. 78, 92 S. Ct. 254, 30 L.Ed.2d 231 (1971). In Richardson,, as in Lofty, supra, the Court was dealing with the Federal statute requiring reductions in social security disability benefits when the recipients received workmen’s compensation benefits. In Richardson it was said at 80 [256-57] [234]:

“In our last consideration of a challenge to the constitutionality of a classification created under the Social Security Act, we held that ‘a person covered by the Act has not such a right in benefit payments as would make every defeasance of “accrued” interests violative of the Due Process Clause of the Fifth Amendment.’ Flemming v. Nestor, 363 U. S. 603, 611, 80 S. Ct. 1367, 1373, 4 L.Ed.2d 1435. The fact that social security benefits are financed in part by taxes on an employee’s wages does not in itself limit the power of Congress to fix the levels of benefits under the Act or the conditions upon which they may be paid. Nor does an expectation of public benefits confer a contractual right to receive the expected amounts.”

The Court added at 81 [257] [235]:

“The appellee argues that the classification embodied in § 224 is arbitrary because it discriminates between those disabled employees who receive workmen’s compensation and those who receive compensation from private insurance or from tort claim awards. We cannot say that this difference in treatment is constitutionally invalid.
“A statutory classification in the area of social welfare is consistent with the Equal Protection Clause of the Fourteenth Amendment if it is ‘rationally based and free from invidious discrimination.’ Dandridge v. Williams, 397 U. S. 471, 487, 90 S. Ct. 1153, 1162, 25 L.Ed.2d 491. While the present case, involving as it does • a federal statute, does not directly implicate the Fourteenth Amendment’s Equal Protection Clause, a classification that meets the test articulated in Dandridge is perforce consistent with the due • process requirement of the Fifth Amendment.”

The Court concluded by saying at 84 [258] [236]:

“If the goals sought are legitimate, and the classification adopted is rationally related to the achievement of those goals, then the action of Congress is not so arbitrary as to violate the Due Process Clause of the Fifth Amendment.”

Constitutionality of offset statutes similarly has been upheld in State Court decisions. See: e.g. Myers v. State, 428 P. 2d 83 (Colorado 1967); Lyons v. City of Los Angeles, 119 Cal. Rep. 159 (Court of Appeal 2d Dist. Div. 3 1975). See also other cases in accord as listed in footnote 2 of Richardson v. Belcher, supra.

Because we accept the rules of law declared in the cited cases as proper to be applied to the facts and circumstances of the subject case, we deem it unnecessary to engage in a particular discussion of the many cases cited by appellant. It will suffice to say that we have concluded that they are distinguishable on their facts or express legal views to which we will not adhere, or both.

The decisions heretofore cited and adopted by us herein, have answered all constitutional issues posed here save two. They are: (1) the suggestion that the offset statute involves an unconstitutional classification in that it applies to State employees to the exclusion of others, and (2) that it permits an unconstitutional taking in violation of Maryland Constitution Article III, § 40.

We see merit in neither contention. As to the suggested invidious discrimination, see Strohmeyer v. Southwestern Bell Telephone Co., 396 S.W.2d 1 (Mo. App. 1965). As to the last remaining contention, if we assume, arguendo, that Article 73B, § 16 conferred a contractual vested right upon the claimant, it remains crystal clear that Article 101, § 33 took nothing thereby conferred.

We see no error.

Judgment affirmed.

Appellant to pay the costs.

      . Article 73B, § 11 (6) and (7) read as follows:
      “(6) Accidental disability benefit. — Upon the application of a member, or of the head of his department, any member who has been totally and permanently incapacitated for duty as the natural and proximate result of an accident occurring while in the actual performance of duty at some definite time and place, without wilful negligence on his part, shall be retired by the board of trustees, provided that the medical board shall certify that such member is mentally or physically incapacitated for the further performance of duty, that such incapacity is likely to be permanent, and that such member should be retired. No beneficiary entitled ' to an accidental disability retirement allowance shall receive any allowance on account of ordinary disability.
      “(7) Allowance on accidental disability retirement. — Upon retirement for accidental disability a member shall receive a service retirement allowance if he has attained the age of 60; otherwise he shall receive an accidental disability retirement allowance which shall consist of:
      (a) An annuity which shall be the actuarial equivalent of his accumulated contributions at the time of his retirement; and
      (b) A pension of sixty-six and two-thirds per centum of his average final compensation, but in no event .shall his total accidental disability retirement allowance exceed his average final compensation.”

      . The State claims an offset by reason of this payment, in any claim under the workmen’s compensation laws. Claimant received also an annuity of $26.75 monthly under the terms of subsection (7) (a) above. The State does not contend that it is entitled to offset this actuarial equivalent of claimant’s accumulated contributions.

      . Article 101, § 36 (4) (a) at the time of the subject injury read as follows: (Ch. 541, Acts 1971)
      “36. (4) (a) In all other cases of disability other than those specifically enumerated disabilities set forth in subsection (3) of this section, which disability is partial in character, but permanent in quality, the Commission shall determine the portion or percentage by which the industrial use of the employee’s body was impaired as a result of the injury and in determining such portion or percentage of impairment resulting in an industrial loss the Commission shall take into consideration, among other things, the nature of the physical injury, the occupation, experience, training and age of the injured employee at the time of injury, and shall award compensation in such proportion as the determined loss bears to the sum of $17,500, the said compensation to be paid weekly at the rate of sixty-six and two-thirds per centum of the average weekly wages, in no case to exceed thirty-five dollars per week, and not less than a minimum of twenty-five dollars per week unless the employee’s established weekly wages are less than twenty-five dollars per week at the time of the injury, in which event he shall receive compensation equal to his full wages, subject to reconsideration of the degree of such impairment by the Commission on its own motion or upon application of any party in interest.”

      . Article 101, § 33 reads as follows:
      “In time of peace and while engaged in military service all officers and enlisted men of the organized militia of the State of Maryland shall be deemed workmen of the State for wages within the meaning of this section; provided that, whenever and so long as provision equal to or better than that given under the terms of this article is made by the federal government for an employee of the military department of Maryland injured in the course of employment, such employee shall not be entitled to the benefit of this article.
      “Whenever by statute, charter, ordinances, resolution, regulation or policy adopted thereunder, whether as part of a pension system or otherwise, any benefit or benefits are furnished employees of employers covered under § 21 (a) (2) of this article, the dependents and others entitled to benefits under this article as a result of the death of such employees, the benefit or benefits when furnished by the employer shall satisfy and discharge pro tanto or in full as the case may be, the liability or obligation of the employer for any benefit under this article. Should any benefits so furnished be less than those provided for in this article the employer shall be liable to furnish the additional benefit as will make up the difference between the benefit furnished and the similar benefit required in this article.
      “The Commission shall have full power to determine whether any benefit provided by the employer is equal to or better than any benefit provided for in this article, and to render an award against the employers to furnish additional benefit or benefits to make up the difference between the benefit furnished by the employers and the benefits required by this article as the case may be. This section shall also be subject to the continuing powers and jurisdiction of the Commission provided for in this article.”

       5 ]. Judge Close in his Memorandum Opinion and Ruling had said:
      “The Court need not reach the issue of the degree of Claimant’s disability since the State’s Retirement System provides benefits to him which are greater than any which could be awarded in the event he were totally and permanently disabled.”

      . Cert. den. January 6, 1976.

      . State Constitution: Article III, § 40 (taking without compensation); Article 23 Declaration of Rights (Denial of due process). United States Constitution: Article I, Section 10 (impairment of the obligation of contract). Fourteenth Amendment (Denial of equal protection and due process).

       7 ]. An apparent reference to Richardson v. Belcher, 404 U. S. 78, 92 S. Ct. 254, 30 L.E.2d 231 (1971), to be discussed infra.

       8 ]. That one was reversed in Richardson v. Belcher, supra.

      . Subsection (16) (1975 Cum. Supp.) provides:
      “ ‘Annuity’ shall mean payments for life derived from the accumulated contributions of a member. All annuities shall be payable in equal monthly installments.”

      . Article III, § 40 reads as follows:
      “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.”