American Fidelity Co. v. State Ex Rel. Short & Walls Lumber Co.

Constable, J., delivered the opinion of the Court. This appeal is from a judgment for a small amount recovered by the appellee against the appellant, which was the surety on a bond given by the Carpenter Company, a road constructing concern, to the State of Maryland. By Chapter 121 (p. 298) of the Acts of Assembly of 1910 it is provided among' other things that: “In all cases where the contract for work and materials shall be given out after competitive bidding, the successful bidder shall promptly execute a formal contract to be approved as to its form, terms and conditions by said Commission, and shall also execute and deliver to said Commission a good and sufficient bond to be approved by said Commission to- the State of Maryland in not less than the amount of the contract price. In mr case shall any such bond be approved or accepted unless the obligators bind themslves therein to the payment of all just debts for labor and materials incurred by the bidder in the construction and improvement of the road contracted for.” In pursuance of the provisions of this Act of Assembly the State Loads Commission, prior to granting, the contract, out of which this action arose, inserted the following condition in the advertisement for bids: “A bond will be required for the faithful performance of the contract and the prompt payment in full of all just debts’ for labor and material incurred in the construction of improvements herein contemplated in such sum as shall be fixed by the Commission after the bids are opened; said sum shall not be less than the amount of the contract, the surety to be an incorporated surety company satisfactory to said Commission.” The Carpenter Company being the successful bidder, entered into a formal contract for the construction of about six ⁵³ miles of State Road in Cecil County, and executed a bond with the appellant as- surety in the sum of $56,155.77, one of the conditions of which was that it should “save and keep harmless the State of Maryland against and from, all losses to it, from any cause whatever, including patent infringements, in the matter of constructing said section of State highway, and shall promptly pay in full all just debts for labor and materials incurred by such contractor in the construction and improvement of the road contracted for, then this obligation to be void, and otherwise to be and remain in full force and virtue in law.” The Carpenter Company before the completion of the road, became insolvent and was adjudicated a bankrupt.

The Short- and Walls Lumber Company was a creditor of the Carpenter Company on account of materials furnished to them in the construction of the road, and brought this suit to recover for that claim. The appellant, after a demurrer to the declaration had been overruled, refused to plead over1, and judgment was entered against it by default for want of a plea. There are two only contentions made by the appellant for a reversal of the: judgment: (1) The invalidity of the Act creating the obligation here sued on. (2) The Act, if valid, gave no right of action to a creditor of the contractor against the surety.

The argument against the validity of the Act is based upon the fact that at the time Chapter 721 of the Acts of 1910 became a law, April 13th, 1910, the Act which it purported to amend had two days previously been repealed by an Act of the same Legislature, namely: By Chapter 218 of the Acts of 1910, approved April 11th, 1910. A review of the Acts of Assembly pertaining to the subject of State roads building, shows that the State Roads Commission was created by Chapter 141 of the Acts of 1908. By 321) of that Act, which became Section 32D of Article 91 of the Code of 1904, it was: provided that: “In all cases where the contract for work and materials shall be given out ⁵⁴ after competitive bidding the successful bidder shall promptly execute a formal contract to he approved as toi its form, terms and conditions by said Commission, and shall also- execute and deliver to said Commission a good and sufficient bond to be approved by said Commission to1 the State of Maryland in not less than the amount of the contract price.” Chapter 218 of the Acts of 1910 repealed and re-enacted with amendments section 32D by adding to the Acts of 1908 provision for an additional member of the State Roads Commission, but re-enacting section 32D of the Acts of 1908. Chapter 721 approved April 13th, 1910, provided: “Section 1.

Be it enacted by the General Assembly of Maryland, That Section 32D of Article 91 of the Code of Public General Laws, entitled ‘Surveyor and State Survey/ sub-title ‘Public Roads/ as enacted by Chapter 141 of the Acts of 1908, be repealed and reenacted with amendments so as to’ read as follows,” and therein provided by 3 2D as we have quoted above that no bond should be accepted unless the obligors bmind themselves therein to the payment of all just debts for labor and material incurred by the bidder in the construction and improvement of the road contracted for. It is claimed, therefore, that this section by this enactment is of no validity because 32D as enacted by Chapter 141 of the Acts of 1908 was not then in existence, having been repealed by Chapter 218 of the Acts of 1910. In a situation of this character the authorities are not unanimous. The appellant cited in support of its contention numerous cases from Indiana, and one from Illinois.

These cases clearly bear out that contention. The greater weight of authority, however, is to the contrary. In 36 Cyc. 1055-1056, it is said: “In many cases it is held that an amendment to be valid must, not relate to a statute which has been repealed or declared unconstitutional, and that where an entire act is void there is nothing to. amend; and thus it is held that an amendatory statute which attempts to amend a section which has already been amended and repealed by im ⁵⁵ plication is void. But in thb absence of constitutional prohibition the better rule has been held to be that an amendar tory statute will be upheld, although it purports to amend a statute already amended or which for any reason has been declared invalid; and that a statute amended and not repealed may be amended; and a statute amending a statute' which has already been superseded by an amendatory statute is valid, where it was the intention of the Legislature to amend the amendatory statute, and not the amended statute!, and a statute purporting to amend a repealed or void statute is valid where the provisions of the new statute are independent and complete in themselves.” And cited cases from a great number of States and also the Federal Courts.

Sutherland on Statutory Construction, section 233 says: “There is a conflict of authority as, to whether a, section which has been repealed can be amended. The question usually arises where a section of an act is amended, ‘to read as follows,’ and is then again amended in the same manner and by the same description, ignoring the first amendment. Most of the older and some of the more, recent, cases hold that such an amendatory act, or the amendment, of a repealed act is, a nullity * * *. A repeal by implication is said to stand upon the same footing in this respect as a direct or express repeal. ‘While there is some conflict, of opinion on the subject,’ says the United States Court of Appeals, ‘the decided weight, of afithority, and the better opinion is that an amendatory statute is not invalid, though it purports to amend a statute which had previously been amended or for any reason held invalid.’ This view, we believe, is sustained by the decisions, -x- -x * “A New York Act of 1883, amended section 16 of an Act of 1856, relating to schools, ‘so as to read as follows.’ In 1864 the Legislature passed an Act to revise and consolidate the laws relating to- public instruction,