Tuxedo Cheverly Volunteer Fire Co. v. Prince George's County

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

Accordingly, we do not address the police power issue. I On November 22, 1974, appellant, Tuxedo Cheverly Volunteer Fire Company, entered into a written contract with appellee, Prince George’s County, whereby the Company agreed to transfer all its real and personal property to the County in exchange for the County’s promise to pay all encumbrances on the property and to provide the Company with increased professional manpower, pension and insurance ³²⁴ benefits for firefighters, a new ladder truck, and other equipment and services. The chief covenant relating to manpower required the County to provide: “Professional firefighters for the operation of the fire station to be known as Tuxedo-Cheverly Station; minimum staffing for each platoon needed for 24-hour coverage shall consist of no less than 4 men, one of whom shall be an officer and one of whom shall be a technician, for the period of one year which commences with the signing of this Agreement; no less than 6 men shall be provided by the County thereafter, one of whom shall be an officer, one of whom shall be a technician and one of whom shall be an Emergency Medical Technician for ambulance duty on each platoon needed for 24-hour coverage.” The equipment needs of the Company included a new ladder truck, a vehicle for transporting staff, firefighting gear, and “Page Boy” monitors. The County also agreed to make annual payments in the amount of $5,500 to the Company.

This provision was contingent upon the appropriation of the necessary funds by the County Council and, in the event that such funds were not made available, the real and personal property of the Company were to be returned. The agreement was executed by the president of the Company and the then County Executive for Prince George’s County, William W. Gullett. In accordance with the contract, the Company’s property was transferred to County ownership. The County complied with a number of its obligations, but the gravamen of appellant’s complaint was that the County failed to provide the six professional firefighters, the new ladder truck, and increased insurance benefits.

The Company filed a bill of complaint for specific performance in the Circuit Court for Prince George’s County against Winfield M. Kelly, Jr., County Executive, Frank P. Briguglio, the late County Fire Chief, and the County. The demurrers of the County Executive and Fire Chief were sustained, and trial proceeded before Judge James F. Couch, Jr. ³²⁵ At the conclusion of the plaintiff’s case, the County moved for a “directed verdict” (more properly, a motion to dismiss under Md. Rule 535), alleging three grounds: first, that the Company had failed to show any harm resulting from the County’s refusal to provide increased manpower; second, that the contract was void since it had not been approved by the County Council, as was required under § 823 of the Charter for Prince George’s County for any future appropriation of funds, 1 and third, that the contract was void by reason of alienating the police powers of the County. The chancellor denied the motion. During the course of the defendant’s case, the County called as a witness one Gloria A. Garner, the records manager in the Office of the Clerk to the Council of Prince George’s County.

She testified that the contract between the fire company and the County had never been approved by the County Council through resolution or bill, and that no minute item appeared in the Council records concerning the contract. This testimony was unrebutted by the Company. The chancellor took the case under advisement, and requested that the parties submit memoranda of law. In its memorandum, the County reiterated the arguments made in its motion for “directed verdict” relating to absence of harm and alienation of police power; the County also argued that the contract was ultra vires and unenforceable under § 823 of the County Charter, because it required appropriations for a future fiscal year and legislative approval had not been obtained.

Plaintiff submitted a reply memorandum in which it was contended with respect to the ³²⁶ latter question that the County had impliedly ratified the contract by accepting its benefits, and could not be permitted to avoid performance on the ground that the contract was ultra vires or illegal. The court subsequently filed a written opinion, finding that the contract was void as an alienation of the police power of the County by virtue of “forc[ing] the Fire Chief to assign a specific number of firefighters to a particular station” and thereby “infringing] on his ability to maximize the use of a limited amount of manpower under his command.” No disposition was made of the County’s argument that the contract was void under § 823 of the Charter. A final decree was then issued denying specific performance and ordering “that the parties be returned to their respective positions prior to November 22, 1974.” II As a threshold proposition, we perceive no obstacle to our consideration of the invalidity of the contracting procedure in that the issue was not decided by the lower court. As has already been noted, the question was fully briefed below and was the subject of sworn testimony on behalf of the County, unrebutted by the fire company.

The County, having prevailed below on the principle of alienation of police power, did not argue in its brief on appeal that the provisions of § 823 of the Charter had been violated. That contention was renewed, however, in the County’s oral argument on appeal. We consider it properly before us. Maryland Rule 1085 provides: “This Court will not ordinarily decide any point or question which does not plainly appear by the record to have been tried and decided by the lower court; but where a point or question of law was presented to the lower court and a decision of such point or question of law by this Court is necessary or desirable for the guidance of the lower court or to avoid the expense and delay of another appeal to this Court, such point or question of law may be decided ³²⁷ by this Court even though not decided by the lower court.” (Emphasis added.) The Rules Committee note to Rule 885, the corresponding rule for the Court of Appeals, and to which Rule 1085 is virtually identical, is indicative of an intent that appellate courts exercise a measure of discretion in considering issues tried but not decided below: “It should be noted that Rule 885 is broader than the former rules in that in certain cases the Court of Appeals may decide a question presented to but not decided by the lower court.

For instance, a case may present two separate legal questions both of which might be argued fully in the lower court. It might be that the lower court would decide one of the questions and then deem it unnecessary to decide the other. Under this Rule the Court of Appeals could decide both questions.” Such discretion may, in our view, very appropriately be exercised in a case involving the specific performance of a contract. There, the validity of the agreement is a condition precedent to the grant of such relief and, indeed, the Court of Appeals has indicated a disposition in such cases to consider matters bearing upon the validity vel non of the agreement, even if not specifically raised at the trial level.

Smith v. Biddle, 188 Md. 315, 318 , 52 A. 2d 473 (1947). In the case cited, an action for specific performance of a contract for the sale of realty where the court reversed a decree directing specific performance, the following statement appears in the opinion: “Appellee seems to think that Rule 9 of this Court, relating to appeals generally, and Section 40 of Article 5, Code, 1939, bar the appellants from raising in this court matters not presented and argued before the chancellor, but we will pass the matter with the comment that this court will always inquire into the question of whether a contract sought to be specifically enforced is in form that the law requires. ³²⁸ Certainly our rule, and the provisions of the code cited, would not bar this court in an inquiry as to whether a contract for the sale of land was violative of the Statute of Frauds, or whéther a third party had authority to sign a contract on behalf of the vendor; or whether the contract was so uncertain and duplicitous as to be unenforceable.” (Emphasis added.) 188 Md. at 318 , 52 A. 2d at 474 2 The above language is strikingly apposite to the instant case and the rule implied therein is applicable with a fortiori effect where, as here, the issue was an integral part of the proceedings below. Compare Eastgate Associates v. Apper, 276 Md. 698 , 350 A. 2d 661 (1976); Pride Mark Realty, Inc. v. Mullins, 30 Md. App. 497, 510 , 352 A. 2d 866, 873 (1976). Unquestionably, the contract between the County and the fire company did call for expenditure of funds by the County in later fiscal years, and thus was subject to the provisions of § 823 of the Charter, previously quoted.

This is exhibited most clearly by the provisions of the contract obligating the County to provide a minimum number of professional firefighters to the Company, and particularly for that number to be increased from four to six after a period of one year, and for the County to provide a new ladder truck and other equipment and insurance benefits to the Company. It is undisputed that the contract was never formally approved by legislative act of the Prince George’s County Council. Our review of the leading authorities in this State and elsewhere indicates that, as a general rule, such a contract is void. However, as appellant pointed out below, the County did receive the benefit of the contract, when title to the fire company’s real and personal property was transferred to its name.

Therefore, we shall consider the further question of whether the County is in the position