Williar v. Baltimore Butchers' Loan & Annuity Ass'n

Bartol, C. J., delivered the opinion of the Court. This suit was instituted by the appellant to recover money paid to the appellee in excess of the legal rate of interest. ⁵⁵⁵ The right of a borrower to maintain, an action of this kind has been settled by the case of Scott vs. Leary, 34 Md., 389 . The defence relied on by the appellee is based entirely upon the Act of Assembly of 1876, ch. 358. The Act amends Art. 95 of the Code, relating to Usury, by adding thereto an additional section as follows: “Provided, however, that nothing in the preceding sections of this Article shall be so construed as to make usury a cause of action in any case where the bond, bill obligatory, promissory note, bill of exchange or other evidence of indebtedness, has been redeemed or settled for by the obligor or obligors, in money or other valuable consideration, except that of a renewal in whole or in part of the original indebtedness, but this section shall not apply to any cases of claims or suits now instituted by assignees in bankruptcy.” In this case the mortgage debt upon which the alleged usury was paid, was finally settled in September 1875.

The appellant protesting at the time against what he considered an illegal demand, and finally paying it, as he states in his testimony, “to have his property released.” This. action was brought on the 18th day of October 1875. The Act of Assembly was approved on the 7th day of April 1876, while this suit was pending. The Circuit Court rejected the plaintiff’s prayers and granted the prayer of the defendant, thereby virtually instructing the jury that the Act of 1876, operated to destroy the plaintiff’s right of action. The first question to be considered arises upon the construction of the Act of Assembly.

Does it apply to pending cases, or must it be construed as intended to apply only to future transactions ? Ho rule of construction is better settled than that every statute is to be construed as prospective in its operation, unless the intention of the Legislature that it shall have a retroactive effect is clearly expressed in the statute. This ⁵⁵⁶ rule is founded in reason and justice, and has been repeatedly recognized and enforced by the Court of Appeals. We refer to Baugher vs. Nelson, 9 Gill, 303 ; State vs. Norwood, 12 Md., 206 ; Clark vs. Mayor, &c. of Balt., 29 Md., 283 ; Davis, Adm’r vs. Clabaugh, 30 Md., 508 , and Herbert and Hairston vs. Gray, 38 Md., 529 .

But for the exception contained in the Act, we should have no hesitation in construing it as prospective only in its operation, and as having no relation to a case where the cause of action had arisen before the Act was passed, and which was pending at the time of its passage. The contrary intent is not plainly expressed in the body of the law, and the general rule of construction would apply. 'But the cardinal rule of construction is to ascertain the intention of the Legislature, as it is expressed in the words of the statute, and for this purpose the whole must be considered together. The law provides “that this section shall not apply to any cases of claims, or suits now instituted by assignees in bankruptcy.” This provision removes whatever ambiguity there is in the antecedent woi’ds of the law, and shows plainly the intent of the Legislature that it should have a retroactive operation, and apply to all cases, save those expressly excepted. If this be not the meaning and intent of the Legislature, this last provision would be nugatory and useless ; for why should the Legislature, by express words, except from the operation of the Act, the particular class of cases mentioned, unless they had been embraced within the general provisions of the law.

These are sufficiently broad and comprehensive to embrace all cases, whether antecedent or subsequent, and the concluding provision to which we have referred, demonstrates that such was the legislative intent. A proviso in a statute excepting from its operation a particular class of cases, which might or might not be otherwise embraced within its general provisions, often ⁵⁵⁷ comes in aid of its construction. Magruder & Tuck vs. Carroll, 4 Md., 335, and Alexander vs. Worthington, 5 Md., 472, were cases involving the construction of the Act of 1849 relating to wills. The question was whether the Act applied to wills executed before its passage.

The first section was ambiguous, and taken alone would have been construed as prospective only in its operation. The second section excepted from its operation wills made before the passage of the Act, where the testator should die before the first day of June thereafter. This section, the Court said, removed all ambiguity from the first section, and clearly showed the intent of the Legislature that the Act should have a retroactive effect, and apply to all wills whenever executed, except such as were particularly mentioned in the second section ; for upon any other construction, the second section would be useless, and without meaning. The reasoning of the Court in those cases, and the rule of construction there adopted are applicable here.

We refer also to Briggs vs. French, 2 Sumner, 251, 257, and Adams vs. Bancroft, 3 Sumner, 384, 387, as showing the effect which an exception in a statute has upon its construction. After the best consideration we have been able to give to this question, we are of opinion that the Act of 1876 was intended to have a retrospective operation, and to apply to all cases, whether arising before or after its passage. The next question to be considered is whether it was within the constitutional power of the Legislature, by a retrospective statute, to take away or impair the plaintiff’s right to maintain the suit. It is contended by the appellant that to give to the Act of Assembly this effect would be within the prohibition of the Constitution of the United States' Art. 1, sec. 10, which declares that “ No Stode * * shall pass any law impairing the obligation of contracts.” The proposition ⁵⁵⁸ maintained by the appellant is that when the Act was passed he bad a valid legal right of action, and that the Act of Assembly taking away his remedy is in violation of the constitutional inhibition ; and he contends further that the Act so far as it is sought to apply it to the present case is inoperative; because the Legislature cannot by a retrospective law take away or destroy a vested right.

The construction of the constitutional provision, so far as it relates to the remedy or right of action has heen often considered and decided. The result of these decisions is thus stated in State vs. Jones, 21 Md., 487 : “ The leading cases on this subject all recognize the distinction between the obligation of a contract, and the remedy by which it may he enforced, and while they treat the latter as a mere creature of the law, at all times within the scope of legislative regulation, they yet establish the rule that the abrogation or suspension of a remedy necessary to enforce the obligation ■'of an existing contract, according to its spirit and true legal intent, is within the inhibition of the Constitution and therefore void." We refer to Cooley on Cons. Lim., 284 to 294, where this subject is fully discussed, and many cases cited. On page 289 the author says, “ But a law which deprives a party of all legal remedy must necessarily he void." It has been repeatedly held by this Court that the Legislature cannot by a retroactive law,, take away vested rights.

Baugher vs. Nelson, 9 Gill, 309 ; Wilderman vs. Mayor, &c., of Balt., 8 Md., 551 ; Bramble vs. Twilley, 41 Md., 436 . The application of this rule to the case before us, depends altogether upon the nature of the legal right asserted by the plaintiff. The Code, Art. 95, fixes the legal rate of interest, and declares that a person guilty of usury shall forfeit all the excess above the legal interest. The appellee contends that this is a suit to enforce the forfeiture, that the claim of the plaintiff is for the forfeiture or penalty imposed by the Code, which it was in ⁵⁵⁹ the power of the Legislature at any time to alter or repeal.

If this be the nature of the demand, there can be no doubt about the correctness of the proposition. It is well settled that such a claim is not within the protection of the constitutional provision, not resting upon or growing out of contract, but based exclusively upon the statute, and that it is in the power of the Legislature at any time to repeal or alter the statute, and the right to recover the forfeiture is thereby destroyed, although it may have been incurred before the statute imposing it has been repealed. Such is no doubt