Gans v. Carter

25 A. 663, 77 Md. 1, 1893 Md. LEXIS 1

• Court: Court of Appeals of Maryland
• Decided: January 13, 1893
• Status: Published

Opinion

Briscoe, J.,

delivered the opinion of the Court.

Johns H. R. Nicholson of Baltimore City, survivor of Andrew J. Nicholson, partners, trading as J. J. Nicholson & Sons, on the 14th of January, 1892, executed a deed of his individual and of the firm’s property to the appellees, John M. Carter and Matthew K. Aiken, in trust for the benefit of creditors. The bond which they executed and filed as trustees contained but one surety, viz., The Fidelity and Deposit Company of Maryland. On the 20th of January, 1892, an attachment at the suit of the appellant, was issued against Johns H. R. Nicholson and laid in the hands of the trustees as garnishees, and the judgment, upon the plea of nulla bona, being in favor of the trustees, the plaintiff has appealed. The question then in the case is whether the Act of Assembly of 1890, chapter 263, incorporating the Fidelity and Deposit Company of Maryland, in so far as it is authorized to become sole surety in all cases where by law two or more sureties are required for the faithful performance of any trust or office, is constitutional? The Code provides that every trustee for the benefit of creditors shall give bond with sureties for the faithful performance of his trust. Art. 16, sec. 205.

By its charter the Fidelity and Deposit Company of Maryland, is authorized to become sole surety in all cases where two or more sureties are required for the faithful performance of any'trust or office; and “it shall and may he lawful," its charter further provides, “for any Court, register, clerk, or other officer to approve said company as sole surety in all such cases."

This provision, it is contended, is in conflict with the Constitution which declares that “The General Assembly shall not pass local or special laws in any of the following enumerated cases, viz., For extending the time for the collection of taxes; granting divorces; changing the name of any person; providing for the sale of real estate belonging to minors or other persons laboring under legal disabilities, * * * giving effect to informal or invalid deeds or wills * * And the General Assembly shall pass no special law for any case for which provision has heen made by an existing general law. The General Assembly at it first session after the adoption of this Constitution, shall pass general laws providing for the cases enumerated in this section which are not already adequately provided for, and for all other cases where a generallawean be made applicable."' Art. 3, sec. 33, Const.

There cannot be, it seems to us, any difficulty as to the object and the mischiefs intended to be remedied by this clause of the Constitution. In the debate upon it in the Constitutional Convention of 1864, by which this limitation upon the legislative power was for the first time imposed, it was said that nearly three-fourths of the time of the Legislature was taken up in the consideration of the local and special laws; and that in many instances special laws had been passed affecting injuriously private and public rights upon mere ex parte applications. And it was deemed advisable therefore in certain cases enumerated in this section to deny altogether the exercise of legislative power; and in order to relieve the Legislature of the necessity of considering applications for special laws in other cases, it was deemed advisable to provide that the General Assembly should not pass a special law in any case for which provision had been made by an existing general law. And further than this it was made the duty of the Legislature to pass general laws providing not only for the cases enumerated in this section, but in all other cases in which a general law could be made applicable. We all agree, therefore, that the Legislature has no power to }Dass a special law in any case for which provision has been made bj1- a general law.

The appellant’s contention assumes, and must necessarily assume, that there was a general law authorizing and empowering the Fidelity and Deposit Company to become surety on a trustee’s bond for the faithful performance of a trust. And herein lies the error of his contention. -There was a general law providing that every trustee for the benefit of creditors should give a bond with sureties. But the suretyship here referred to is individual or personal suretyship.

There was no general law providing for corporate security in such cases, and as a corporation can exercise such powers only as are conferred upon it by its charter, the Fidelity and Deposit Company could not, it is clear, become a surety on a trustee’s bond, unless specially authorized by its charter. And the provision in its charter conferring this power cannot be said therefore to be a special law for which provision had been made by a general law.

But then it is argued that this provision is unconstitutional because it confers upon the company a privilege or right not enjoyed by natural persons. In what sense it may be considered a privilege for one to become a surety for another, it may not be easy to understand. But be that as it may, if it is to be considered a privilege it is one which every person has the right to exercise, independent altogether of legislative authority.

We cannot agree, however, that the Legislature has no power to confer privileges and franchises upon a corporation not enjoyed by individual persons. Such franchises are granted in the interest of the public to be exercised, in theory at least, for the benefit of the public, and subject always under the Constitution to repeal and amendment by the Legislature as it may, in the exercise of its judgment, deem proper. We do not mean of course that it can grant franchises forbidden by the Constitution. And the Constitution having declared the legal rate of interest to be six per cent, per annum, unless otherwise provided by the General Assembly, and the Legislature having fixed the rate at six per cent., it could not be held to authorize a corporation to charge a higher rate than allowed by the general law. In other words, the Constitution meant that the rate of interest should be uniform alike upon individuals • and corporations.

Now as to the last of these supposed constitutional difficulties, namely, that the provision is in conflict with sec. 29, Art.-3, which declares “that every law enacted by the General Assembly shall embrace but one subject, and that shall be described in its title,” we have but a word to say, and that is to repeat what we have so often said, that the object of this clause was to prevent the embodying into the same Act distinct and separate matters of legislation, having no connection whatever with each other, and matters not referred to in the title of the Act. Here the title of the Act is “An Act to change the name of the Fidelity Loan and Trust Company of Baltimore City, to the Fidelity and Deposit Company of Maryland, and to amend and define the powers of said company.” Every provision in the Act refers and relates to the powers and franchises to be exercised by the company, and among these powers is the one authorizing it to be surety on the bonds of trustees. Such a provision is not a repeal by implication, or otherwise, of section 205, Art. 16. That section still remains in full force, but it applies, as we have said, to the suretyship of natural persons. The charter of the Eidelity and Deposit Company authorizes it to become surety in certain cases, a power which it could not exercise under any general law. And the grant of such a power in no manner interferes with the general law in regard to personal security. County Commissioner's of Dorchester Co. vs. Meekins, 50 Md., 28; County Commissioners of Calvert Co. vs. Hellen, 12 Md., 603.

(Decided 13th January, 1893.)

There were two exceptions reserved by the appellant at the trial below, one to the admissibility of the bond given by the trustees, in evidence, and the second, to the rejection of the prayers offered hy the plaintiff. The prayers were based upon the theory that the Act of 1890 was unconstitutional and void, and were properly rejected.

It follows, therefore, for the reasons heretofore expressed, that the Court below committed no error in its rulings, and the judgment will be affirmed.

Judgment affirmed.