# President of Georgetown College v. Madden

> District Court, D. Maryland · September 24, 1980 · 505 F. Supp. 557

URL: https://www.frixlaw.com/law-library/cases/1950895

## Case

- **Full name:** The PRESIDENT AND DIRECTORS OF GEORGETOWN COLLEGE v. Dennis W. MADDEN Et Al.
- **Court:** District Court, D. Maryland
- **Decided:** September 24, 1980
- **Citations:** 505 F. Supp. 557; 1980 U.S. Dist. LEXIS 14350
- **Precedential status:** Published
- **Opinion:** Opinion by Kaufman
- **Judges:** Frank A. Kaufman
- **Cited by:** 49 later opinions in the Frix Law Library

## Citator (automated)

- **Yellow flag:** Modified by a later decision, 660 F.2d 91 (1981).
- Negative treatments: 1
- Distinguished by: 0
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/1950895

## How later opinions describe it (automated extraction)

- explaining that “[a] sealed instrument is not created by accident” and “the intent of the parties is what controls.”

## Opinion text

FRANK A. KAUFMAN, District Judge.
The President and Directors of Georgetown College (Georgetown) bring this diversity action
1
sounding in breach of contract and negligence
2
against the architects, structural engineers, general contractor, masonry subcontractor, and surety involved ín the construction of one of Georgetown’s dormitories, Harbin Hall, which was built during the years 1963-66. Georgetown seeks damages for alleged defects in the construction of Harbin Hall, the surface brick of which has undergone spalling, cracking, and bulging.
3
This action was commenced on August 25, 1977.
Motions for summary judgment have been filed by all defendants. The majority of those motions are based on the grounds that this action is barred by limitations. For the purpose of adjudicating those motions, the facts have, for the most part, been stipulated.
In December 1962, Georgetown entered into a contract with two associated architec
*562
tural firms, Cooper and Auerbach, and Walton and Madden (architects)
4
for the performance of architectural services relating to a proposed residential dormitory to be located on Georgetown’s campus in Washington, D.C. Among the services to be performed were the inspection of the progress and quality of work during the construction phase of the project and the certification of progress payments to the contractor. In February 1963, the architects executed a letter agreement with the structural engineering firm of Scullen and Marchigiani. On October 24, 1963, Georgetown entered a construction contract with Victor R. Beau-champ Associates, Inc. (Beauchamp) for the construction of Harbin Hall in accordance with the plans and specifications incorporated therein. On the same date, Standard Accident Insurance Company, as surety, and Beauchamp, as principal, executed a performance-payment bond for the benefit of Georgetown in the penal sum of $2,019,-619.00. Defendant Reliance Insurance Co. (Reliance) is the successor in interest to Standard Accident Insurance Co. under that bond.
Under the terms of the construction contract (¶ 34), Beauchamp was permitted, with the approval of Georgetown, to subcontract specialty work according to normal contracting practices, with Beauchamp to remain fully liable for all acts or omissions of any subcontractor. Beauchamp subcontracted the masonry work to Anchor Associates, Inc. (Anchor). All the construction defects now complained of by Georgetown stem from the masonry work performed by Anchor.
5
Anchor completed the allegedly defective masonry work on or before July 24, 1964. As part of progress payment number twelve, dated November 13, 1964, defendant Madden certified the masonry work here in issue.
6
*563
On September 23, 1964, four floors of Harbin Hall were first occupied and used by Georgetown. Certificates of occupancy were issued to Georgetown by the Department of Licenses and Inspections of the District of Columbia on November 17, 1964. Georgetown occupied the remainder of Harbin Hall on or before January 14, 1965, though work still remained to be done at that time. Final certification of the building by the architects and payment of the final installment to Beauchamp took place on June 2,1966. Georgetown first discovered the defective condition which gave rise to the within suit in September 1976.
The construction contract between Georgetown and Beauchamp provides in relevant part:
¶25. Payments to Contractor (a) Not later than the 15th day of each calendar month the Owner shall make a progress payment to the Contractor on the basis of a duly certified and approved estimate of the work performed during the preceding calendar month under this contract, but to insure the proper performance of this contract, the Owner shall retain ten per cent (10%) of the amount of each estimate until final completion and acceptance of all work covered by this contract * * *.
******
(c) All material and work covered by partial payments made shall thereupon become the sole property of the Owner, but this provision shall not be construed as relieving the Contractor from the sole responsibility for the care and protection of materials and work upon which payments have been made or the restoration of any damaged work, or as a waiver of the right of the Owner to require the fulfillment of all of the terms of the contract.
******
¶ 26. Acceptance of Final Payment Constitutes Release
The acceptance of the Contractor of final payment shall be and shall operate as a release to the Owner of all claims and all liability to the Contractor for all things done or furnished in connection with this work and for every act and neglect of the Owner and others relating to or arising out of this work. No payment, however, final or otherwise, shall operate to release the Contractor or his sureties from any obligations under this contract or the Performance and Payment Bond, ******
¶ 40. General Guaranty Neither the final certificate of payment nor any provision in the Contract Documents nor partial or entire occupancy of the premises by the Owner shall constitute an acceptance of work not done in accordance with the Contract Documents or relieve the Contractor of liability in respect to any express warranties or responsibility for faulty materials or workmanship. The Contractor shall remedy any defects in the work and pay for any damage to other work resulting therefrom, which shall appear within a period of one year from the date of final acceptance of the work unless a longer period is specified. The Owner will give notice of observed defects with reasonable promptness.
In addition to the above sections, the contract specified a single sum of $2,019,-619.00 to be paid by Georgetown to Beau-champ to “commence and complete” the construction of Harbin Hall. Other provisions in the contract made time of the essence for the full completion of the project and provided for completion of all required work within a specified time.
7
*564
I.
Motion of Reliance Insurance Co. for Summary Judgment
Reliance seeks summary judgment on the grounds that plaintiff’s claim under the performance bond is time-barred. In both Maryland and the District of Columbia, a bond is a specialty to which a twelve year statute of limitations attaches.
8
Md. Code Ann., Cts. & Jud.Proc. Art. § 5-102 (a)(2), D.C. Code § 12-301 (6). Both Maryland and the District of Columbia have held that, in contract actions, the cause of action accrues and the limitations period runs from the date of the alleged breach and not from the date the harm is discovered.
9
The exterior brick wall, which is the subject of this suit, was completed in June 1964 and certified by the architects as part of the
*565
twelfth progress payment in November 1964. Though Georgetown fully occupied the building in January 1965, final payment was not certified by the architects until June 1966. If plaintiff’s cause of action arose after August 26,1965, the suit against Reliance was timely. Thus, it must be determined whether the breach occurred upon completion of the exterior wall in 1964 or upon final payment for the completed building in 1966. For reasons set forth
infra,
this Court concludes that the breach occurred upon final delivery and acceptance of the building in June 1966, and that thus this case against Reliance was timely commenced.
Because the construction contract is incorporated into the performance bond agreement, the two must be interpreted together.
Lange v. Board of Education,
183 Md. 255, 261 , 37 A.2d 317 (1944).
10
The contract of Georgetown with Beauchamp for the construction of Harbin Hall is a contract for a single sum. The contract is indivisible. In
Westinghouse Electric Corp. v. State Tax Commission,
206 Md. 392, 402 , 111 A.2d 661 (1955), Judge Collins wrote:
The law seems to be, however, that where a total price for work is fixed by a contract, the work is not rendered divisible by the progress payments, particularly where the contract provided that the total price is not to be paid until the work is completed. [Citations omitted.]
Restatement [First] Contracts § 266, comment (e) relates to “divisible contracts.” Illustration 4 to that Comment states (at 386):
A engages B, a contractor, to build a house. A promises to pay instalments amounting to three-quarters of the agreed price as the building reaches specified stages of construction; and to pay the remaining quarter on receiving an architect’s certificate of satisfactory completion. The contract is not divisible. The payments are not in exchange for a specified fraction of the building, but are part payments on account of a total sum. The only promises for an agreed exchange are the promises to build the completed house and to pay the total price.
11
By the terms of the contract, Beau-champ was to deliver a completed building. Paragraph 25, quoted
supra
p. 563, providing for progress payments, reserves all of plaintiff’s rights to require fulfillment of the contract; additionally, the contract is replete with references to the completion of the entire project.
12
The contract calls for a single, indivisible performance. That is true even though the construction of the building required performance over an extended period of time and even though there is provision for progress payments
*566
during the course of the construction and prior to completion of the entire project.
12A
Under the terms of the construction contract, Georgetown had the right to require defects to be remedied by the contractor, Beauchamp, at any time prior to final acceptance. Paragraph 20 of the Construction Contract provided:
20. Correction of Work
All work, all materials, whether incorporated in the work or not, all processes of manufacture, and all methods of construction shall be at all times and places subject to the inspection of the Architect/Engineer who shall be the final judge of the quality and suitability of the work, materials, processes of manufacture, and methods of construction for the purposes for which they are used. Should they fail to meet his approval they shall be forthwith reconstructed, made good, replaced and/or corrected, as the case may be, by the Contractor at his own expense. Rejected material shall immediately be removed from the site. If, in the opinion of the Architect/Engineer, it is undesirable to replace any defective or damaged materials or to reconstruct or correct any portion of the work injured or not performed in accordance with the Contract Document, the compensation to be paid to the Contractor hereunder shall be reduced by such amount as in the judgment of the Architeet/Engineer shall be equitable.
Paragraph 23 further provided:
23. Right of the Owner to Terminate Contract
In the event that any of the provisions of this contract are violated by the Contractor, or by any of his subcontractors, the Owner may serve written notice upon the Contractor and the Surety of its intention to terminate the contract, such notices to contain the reasons for such intention to terminate the contract, and unless within ten (10) days after the serving of such notice upon the Contractor, such violation or delay shall cease and satisfactory arrangement of correction be made, the contract shall, upon the expiration of said ten (10) days, cease and terminate. In the event of any such termination, the Owner shall immediately serve notice thereof upon the Surety and the Contractor and the Surety shall have the right to take over and perform the contract; Provided, however, that if the Surety does not commence performance thereof within ten (10) days from the date of the mailing to such Surety of notice of termination, the Owner may take over the work and prosecute the same to completion by contract or by force for the account and at the expense of the Contractor and the Contractor and his Surety shall be liable to the Owner for any excess cost occasioned the Owner thereby, and in such event the Owner may take possession of and utilize in completing the work, such materials, appliances, and plant as may be on the site of the work and necessary therefor.
Accordingly, under those provisions of the construction contract, no breach of the sort alleged herein could occur until and unless the Contractor refused to remedy the discovered defect. Such request to remedy could be made at any time during the course of the contract. If the Contractor corrected the alleged defects, there would be no breach of the contract and, accordingly, no cause of action under the performance bond. In fact, the surety’s bond agreement provided that the bond would be void
if the Principal [Beauchamp] shall well, truly and faithfully perform its duties, all the undertakings, covenants, terms, conditions, and agreements of said contract during the original term thereof, and any extensions thereof which may be granted by the Owner, with or without notice to the Surety, and if he [Beauchamp] shall
*567
satisfy all claims and demands incurred under such contract * * *.
The breach of the construction contract therefore occurred only upon final acceptance of the building under the contract.
13
A cause of action for breach of the construction contract accrued when Beau-champ delivered a building not in accordance with the contract specifications.
14
By the terms of the contract, ¶ 40, the final certification and acceptance of the building did not constitute acceptance of “work not done in accordance with the Contract Documents.”
15
For this Court to hold that the cause of action for breach of contract arose and the statute of limitations began to run as of the date of final delivery and acceptance of the entire building leads to a reasonable result. If this Court were to hold — as it does not— that the breach occurred and the cause of action accrued as of the date the defect was incorporated into the building or as of the date the architect certified that portion of the building containing the defect, each defect or certification would constitute its own breach and would start the statute of limitations running as to it alone. If the contract performance extends over a substantial period of time — as it did in this case, in which nearly three years elapsed between the signing of the contract and final acceptance of the completed building — then the limitations period for early defects would expire long before those for later defects. A court would be required closely to scrutinize each step in the construction process to determine when the breach occurred and a cause of action accrued. If an early defect contributed to a
*568
later defect and the statute had run as to the earlier but not as to the later breach, what could prove to be a very technical analysis might be required of the court to determine which breach was in issue and to what extent one breach might have contributed to the other. Moreover, if the construction of a building were to extend over a longer period than the statute of limitations, limitations might well run on an earlier defect before the complaining party would have an adequate opportunity to discover it.
On the other hand, when the final acceptance is considered as the date of breach, the court has a fixed point in time upon which to focus in determining whether the limitations period has run. That result is particularly desirable where, as here, the contract is for a single performance, i. e., a completed building, and provides that the work may be inspected at any time during the course of the contract and that correction may be required for any defect as noted.
See
¶ 23 of the contract.
16
Furthermore, to hold that the limitations period begins to
*569
run when the completed building is delivered wholly comports with the purpose of a limitations period to bar stale claims and to bring about repose. A statute of limitations is not designed to allow parties to avoid answering for their errors and wrongs. Nor is there any difficulty posed by potential delays by the architect or owner in certifying final completion and thereby extending the limitations period. In practice, contractors will be anxious to obtain final payment, including percentages withheld from progress payments, and hardly will countenance delays.
16A
In sum, this Court concludes that the breach here in issue did not occur until June 2, 1966. As Georgetown had 12 years from that date to file its claim, and as that claim was filed on August 26, 1977, the claim against Reliance has been timely stated by Georgetown. Accordingly, Reliance’s summary judgment motion will be denied.
II.
Motions of Defendants Madden, Walton, Auerbach, Scullen and Marchigiani, and Beauchamp re Tort
Claims
17
Because this is a diversity case, this Court must apply the conflicts of laws rules of Maryland, the forum state.
Klaxon v. Stentor Electrical Mfg. Co.,
313 U.S. 487 , 61 S.Ct. 1020 , 85 L.Ed. 1477 (1941). In tort actions, Maryland applies the doctrine of lex loci delicti; the applicable substantive law is the law of the place of the wrong, i. e., the law of the state in which the injury occurs.
18
On the other hand, as to matters of procedural law, Maryland applies the law of the forum.
Doughty v. Prettyman,
219 Md. 83, 88 , 148 A.2d 438 (1959).
19
In this case there is no question that the alleged injury to Georgetown occurred in the District of Columbia, the site of the allegedly defective construction, and that the substantive law of that jurisdiction applies.
Both Maryland and the District of Columbia have enacted statutes,
20
to limit the
*570
liability of architects, engineers, and builders to designated periods of time for injuries resulting from improvements to real property. The liability period provided by the Maryland statute (Md.Code Ann., Cts. & Jud.Proc. Art. § 5-108) is twenty years to contractors, architects and engineers.
21
The District of Columbia statute (D.C.Code § 12-310) establishes a liability period of ten years. Whether plaintiff’s tort claims against the architects, contractors, and structural engineers are time-barred raises three issues: (a) Is D.C.Code § 12-310 a substantive or procedural law of the District of Columbia? (b) If it is substantive, is it applicable in the within case? and (c) If it is applicable herein, is it constitutional? For the reasons set forth hereinbelow, this Court holds that D.C.Code § 12-310 is substantive law and would therefore be applied to this case by the Court of Appeals of Maryland, that § 12-310 is applicable in this case, and that § 12-310 is constitutional.
*571
A.
Substance or Procedure
The characterization which a Maryland state court would give D.C. Code § 12-310 — i. e., substantive or procedural— is binding upon this Court.
See Maryland Casualty Co. v. Williams,
377 F.2d 389 , 393 n.l (5th Cir. 1967). As a general rule, a statute of limitation is considered procedural.
Doughty v. Prettyman,
219 Md. at 88 , 148 A.2d 438 . However, when the statute of limitations bars the right and not merely the remedy, an exception to the general rule applies and the statute of limitations is considered substantive.
22
Certain statutes of limitations have been held substantive rather than procedural in wrongful death (statutory) actions.
23
The reasoning in those wrongful death action cases would seem applicable with regard to the tort actions herein.
Although no District of Columbia or Maryland or any other court has seemingly construed D.C.Code § 12-310, the Court of Special Appeals of Maryland recently spoke as follows concerning Md.Code Ann., Cts. & Jud.Proc. Art. § 5-108:
Although framed as a statute of limitations, § 5-108 has been classified in the Revisor’s Note as a grant of immunity to builders, contractors, realtors, and landlords after 20 years from the date the improvement is completed.
Allentown Plaza Associates v. Suburban Propane Gas Corp.,
43 Md.App. 337 , 338 n.2, 405 A.2d 326 (1979). Therein, Judge Moore further stated (at 343, 405 A.2d 326 ), after quoting from the Revisor’s Note:
In our judgment, there is substantial merit to the suggestion in the Revisor’s Note, that the section be conceived “as a grant of immunity.”
The Maryland Revisor’s Note to section 5-108 provides, in relevant part, as follows (emphases added):
This section is new language derived from Article 57, § 20. It is believed that this is an attempt to relieve builders, contractors, landlords, and realtors of the risk of latent defects in design, construction, or maintenance of an improvement to realty manifesting themselves more than 20 years after the improvement is put in use.
The section is drafted in the form of a statute of limitation, but, in reality, it grants immunity from suit in certain instances.
Literally construed, it would compel a plaintiff injured on the 364th day of the 19th year after completion to file his suit within one day after the injury occurred, a perverse result to say the least, which possibly violates equal protection. Alternatively, the section might allow wrongful death suits to be commenced 18 years after they would be barred by the regular statute of limitations.
The section if conceived of as a grant of immunity, avoids these anomalies.
The normal statute of limitations will apply if an actionable injury occurs.
24
That Revisor’s Note was before the Maryland legislature when it voted on the pro
*572
posed legislation.
25
As such, the Note is a strong and clear indication of legislative intent.
See Allers v. Tittsworth,
269 Md. 677, 683 , 309 A.2d 476 (1973) (Henderson Commission’s comment).
If Maryland would likely consider its own statute as a grant of immunity, it is also likely that Maryland would view D.C.Code § 12-310 in the same way. The legislative history of § 12-310 states (118 Cong.Rec. 36939 (1972)):
The purpose of S. 1524 is to provide a limitation on the period of time during which an action may be brought to recover damages, contribution, or indemnity against architects, designers, engineers, or contractors on the ground of a defective or unsafe condition of an improvement to real property. At the present time in the District of Columbia there is no limitation as to the period of liability of an architect, engineer, or contractor for a defective or unsafe condition in an improvement to real property. Thus, such parties may become defendants in a suit brought by a person who sustains a personal injury in a building which was built 25 or even 50 years ago. The only limitation applying in such case under District of Columbia law is that such an action must be brought within 3 years after the date the cause of action accrues.
The bill, S. 1524 reported by the Senate, would require that such an action would be barred unless it is brought within 10 years from the date the improvement to real property was substantially completed.
The above-quoted legislative history could be read to mean that the claim must be filed within ten years from the date of substantial completion of the structure involved. That, however, would raise the difficulties set forth in the Revisor’s Note to Md.Code Ann., Cts. & Jud.Proc. Art. § 5-108 (1974 volume). Further, in 1967, when the proposed District of Columbia statute was first debated in Congress, Congressman Abernethy, speaking for the Committee on the District of Columbia, in calling up the bill, made clear that the proposed statute was intended to operate independently of the normal three-year statute of limitations and that it would therefore operate upon the right, and not upon the remedy (113 Cong.Rec. 28158 (1967)):
26
The effect of this amendment is that if a cause of action accrues at any time up to and including the last day of the 5-year period from the date the improvement was substantially completed [ten years in the later version of § 12-310], an action in damages for injury to real or personal property could be filed within 3 years — District of Columbia Code, section 12-301(3) — in the case of personal injury an action could be filed within 3 years— District of Columbia Code, section 12-301(8) — and in the case of wrongful
*573
death, an action could be filed within 1 year — District of Columbia Code, section 16-2702.
Thus, D.C.Code § 12-310, like Md.Code Ann., § 5-108, provides immunity after the ten-year period (twenty in Maryland) has elapsed.
Though no court appears to have considered any similar statutes in a choice of law setting, such statutes have been construed by courts in various other contexts. All but one court has held such similar statutes to be substantive law.
27
In
Rosenberg v. Town of North Bergen,
293 A.2d 662, 666-67 (N.J.1972), the Supreme Court of New Jersey in considering a constitutional due process attack on a similar statute
28
, wrote as follows:
It seems important, first, to examine the nature of this law. In an important respect it is unlike the typical statute of limitations. Commonly such a statute fixes a time within which an injured person must institute an action seeking redress, and generally this time span is measured from the moment the cause of action accrues. Here such is not the case. The time within which suit may be brought under this statute is entirely unrelated to the accrual of any cause of action.
Where a claim for redress is based upon negligent injury to person or property, the cause of action accrues when there has been a negligent act with proximately resulting injury or damage. The careless act itself is not enough to give rise to a cause of action; there must also be consequential injury or damage. [Citation omitted.] Thus plaintiff’s alleged cause of action did not arise until she fell and sustained injury. Of course this was many years after the ten-year period fixed by the statute had expired. She claims that the statute, in its application to her, amounts to a deprivation of due process, since, as she expresses it, the statute bars her cause of action before it has arisen. This formulation suggests a misconception of the effect of the statute. It does not bar a cause of action; its effect, rather, is to prevent what might otherwise be a cause of action, from ever arising. Thus injury occurring more than ten years after the negligent act allegedly responsible for the harm, forms no basis for recovery. The injured party literally has
no
cause of action. The harm that has been done is
damnum absque injuria
— a wrong for which the law affords no redress. The function of the statute is thus rather to define substantive rights than to alter or modify a remedy. The Legislature is entirely at liberty to create new rights or abolish old ones as long as no vested right is disturbed. [Citations omitted.]
*574
In
Freezer Storage, Inc. v. Armstrong Cork Co.,
382 A.2d 715, 721 (Pa. 1978),
affirming
341 A.2d 184 (Pa.Super. 1975), the Court stated that “[t]he Legislature has not limited the recovery available under a cause of action [which would violate the Constitution of the State of Pennsylvania, Art. Ill § 18] but eliminated that cause of action altogether in certain cases.” In
Freezer,
the Pennsylvania statute provided that no action could be brought against persons furnishing the design or construction of improvements to real property more than twelve years after the completion of such improvements. 341 A.2d at 185 . Other states have characterized such statutes as grants of
immunity
29
.
Immunity from suit is substantive law for choice of law purposes.
See LaChance v. Service Trucking Co.,
215 F.Supp. 162, 164 (D.Md. 1963);
Tobin v. Hoffman,
202 Md. 382, 392 , 96 A.2d 597 (1953)
30
.
Seemingly, only one court has held a similar statute to be procedural.
Regents of the University of California v. Hartford Accident and Indemnity Co.,
21 Cal.3d 624 , 147 Cal.Rptr. 486 , 581 P.2d 197 (Cal.1978). That case did not involve a choice of law question, but rather involved the question of whether or not a surety could enjoy the protections of that statute. Justice Tobriner wrote (at 206-07; footnotes omitted):
With judicial recognition that under some circumstances causes of action for negligence, product liability, or breach of warranty may not arise until discovery, the Legislature has responded by enacting statutes of limitation which require suit be filed within the shorter of two periods, one measured from the date of discovery and a second, longer period measured from the event giving rise to the cause of action. Section 337.15, read together with Code of Civil Procedure sections 337 and 338, enacts such a two-step limitation: actions founded upon a latent defect in the development of real property must be filed within three or four years of discovery, depending on whether the action rests on breach of warranty or negligence, but in any case within ten years of the date of substantial completion of the improvement. To classify such two-step statutes as substantive entails a variety of consequences, not only with respect to suretyship doctrine, but also in connection with questions of choice of law, pleading, and waiver. [Citation omitted.] We have no reason to believe that the Legislature in the instant enactment intended such novel collateral consequences or contemplated anything other than an ordinary, procedural statute of limitation.
The California statute
31
, however, does
*575
not function in the same manner as the Maryland and District of Columbia statutes. Under Maryland or District of Columbia law, if a cause of action arises on the 364th day of the ninth year, the injured plaintiff still has the normal three year limitations period in which to file suit.
32
By contrast, under the California statute, if the injury occurs on the 364th day of the ninth year, the plaintiff has one day to file suit, or else he will be time-barred. Thus, the California statute would seem to operate on filing times as do traditional limitations statutes, whereas the District of Columbia and Maryland statutes provide time before the normal filing times begin to run and thus limit the right itself.
In sum, this Court concludes that the Court of Appeals of Maryland would view D.C.Code § 12-310 as a substantive grant of immunity and that that Court should accordingly apply the District of Columbia statute in this case pursuant to the principle of lex loci delicti.
B.
Applicability of section 12-310 to Plaintiff
Plaintiff contends that even if section 12-310 is substantive law, it does not bar plaintiff’s claims because (1) plaintiff seeks damages for the design and construction deficiencies themselves rather than for injuries “resulting from” those deficiencies, (2) plaintiff suffered injury at the time the deficiencies were incorporated into the building and thus within the ten-year period of section 12-310, even though plaintiff did not discover that injury until a later date (see
Harig v. Johns-Manville Co.,
284 Md. 70 , 394 A.2d 299 (1978), and (3) plaintiff’s cause of action against the architects is based on contract, as is the plaintiff’s claim against Beauchamp.
In maintaining that it seeks damages for the design and construction deficiencies themselves rather than for injuries “resulting from” those alleged deficiencies, and that section 12-310 is not applicable herein, plaintiff is attempting to draw a distinction between section 12-310 and similar statutes in other states. Those other statutes expressly provide that claims for any design or construction deficiencies as well as claims for injuries resulting from such deficiency are barred after the relevant time period. Section 12-310 refers only to claims for resulting injuries as barred, and, unlike the other statutes, expressly excepts actions based upon contracts. The answer to those contentions of plaintiff, however, is that, while Georgetown may seek damages for the deficiencies themselves in an action based upon Georgetown’s contracts with the architects and contractor
33
plaintiff’s tort claims are precisely the type of “action to recover damages for * * * (ii) injury to real or personal property * * * resulting from the defective or unsafe condition of an improvement to real property” specified in section 12-310.
Georgetown next asserts that it suffered injury when the defect was incorporated into the building and the building was certified by the architects. Characterizing its claim as one against the architects and builders for professional malpractice,
see Steelworkers Holding Co. v. Menefee,
255 Md. 440, 443 , 258 A.2d 177 (1969), Georgetown urges that the discovery rule applies and that therefore the running of the limitations period was tolled until plaintiff actually discovered the injury in September 1976. The answer, however, is that
*576
if the mere incorporation of a defect constitutes an injury for which plaintiff need not claim within the time limits of section 12-310, even though the resulting damage is not discovered until many years after the ten-year period in section 12-310 has run, then the whole purpose of section 12-310 and similar statutes — to provide builders and design professionals with a finite period of risk for any one project — would be vitiated.
34
Georgetown lastly asserts that its claims are “based on a contract” and therefore are outside the strictures of section 12-310.
See
section 12-310(b)(l).
35
Section 12-310 does not extend to causes of action sounding in contract. However, with regard to the architects, Georgetown has not invoked its contract. If the contract exception means only that the mere existence of a contract between the owner and builder is equivalent to having a suit “based on a
*577
contract,” then section 12-310(b)(l) would render the statute meaningless, because virtually all relationships between owners and architects or builders are founded upon an express or implied contract. It is also to be noted that section 12-310(a)(2)(B) states that the date of completion of an improvement is the earlier of the date of first use or the date “it is first available for use after having been completed in accordance with the
contract
* *
36
The legislative history of section 12-310 states: “The limitation on actions provided in the bill does not apply to or affect the owner’s contract or the warranties of an architect, contractor, or engineer in relation to the improvement.” 113 Cong. Rec. 28158 (1967). The simple meaning of section 12-310 and of that statement is that the owner may pursue his contractual remedies without regard to the provisions of section 12-310. Since the discovery rule has not been extended under District of Columbia (or Maryland) law to contract actions, the regular statutes of limitations for contracts, sealed instruments or warranties provide for certain dates when liability ends.
37
For the reasons set forth
supra,
this Court concludes that section 12-310 is fully applicable in the within case.
C.
Constitutionality of section 12-310
The constitutionality of section 12-310 is challenged herein under the equal protection principles embodied in the Due Process Clause of the Fifth and Fourteenth Amendments. The question arises as to whether the different treatment accorded to builders, architects, engineers, and other design professionals engaged in improvements to real property on the one hand, and owners, occupiers and suppliers on the other hand, is valid. The former group is benefited by the limitation on liability granted by section 12-310; the latter group is not so benefited, and the liability of its members is not so limited.
See
section 12-310(b)(2). A number of state courts have held that similar statutes violate their
state
constitutions on the grounds that such classifications are irrational and violative of equal protection.
38
Most federal courts which have considered such statutes in the context of
federal
constitutional attacks seem to have rejected those challenges.
39
The United
*578
States Supreme Court, on an appeal from a decision of the Supreme Court of Arkansas rejecting an equal protection attack on such a statute based on the state and federal constitutions, dismissed the case for want of a substantial federal question.
Carter v. Hartenstein,
401 U.S. 901 , 91 S.Ct. 868 , 27 L.Ed.2d 800 (1971). A summary dismissal of a case for want of a substantial federal question is a decision by the United States Supreme Court on the merits of that case which this Court is not free to disregard.
Hicks v. Miranda,
422 U.S. 332, 344 , 95 S.Ct. 2281, 2285 , 45 L.Ed.2d 223 (1975). Moreover, “[sjummary actions * * * should not be understood as breaking new ground but as applying principles established by prior decisions to the particular facts involved.”
Mandel v. Bradley,
432 U.S. 173, 176 , 97 S.Ct. 2238, 2241 , 53 L.Ed.2d 199 (1977)
(per curiam).
After “applying principles established by prior [Supreme Court] decisions,” this Court concludes that section 12-310 is constitutional. Section 12-310 is an economic regulation and does not focus on either a fundamental right or a suspect class. It therefore does not merit strict scrutiny and passes muster under the rational basis test.
See McLaughlin v. Florida,
379 U.S. 184 , 85 S.Ct. 283 , 13 L.Ed.2d 222 (1964) (race involved); L. Tribe, American Constitutional Law §§ 16-2, 16-6, and cases cited therein.
40
In
Massachusetts Board of Retirement v. Murgia,
427 U.S. 307, 314 , 96 S.Ct. 2562, 2567 , 49 L.Ed.2d 520 (1976)
(per curiam)
(dealing with forced retirement of state policemen at age fifty), the Supreme Court stated (footnote omitted):
We turn then to examine this state classification under the rational-basis standard. This inquiry employs a relatively relaxed standard reflecting the Court’s awareness that the drawing of lines that create distinctions is peculiarly a legislative task and an unavoidable one. Perfection in making the necessary classifications is neither possible nor necessary.
Dandridge v. Williams,
[ 397 U.S. 471 ], 485 [1970] * * *. Such action by a legislature is presumed to be valid.
41
In
Silver v. Silver,
280 U.S. 117, 122 , 50 S.Ct. 57, 58 , 74 L.Ed. 221 (1929), the Court, in upholding the constitutionality of a Connecticut automobile guest statute, stated in an opinion by Mr. Justice Stone that “the Constitution does not forbid the creation of new rights, or the abolition of old ones recognized by the common law, to attain a permissible legislative object.”
See also, Sanner v. Trustees of Sheppard and Enoch
*579
Pratt Hospital,
278 F.Supp. 138, 141-44 (D.Md.),
aff’d,
398 F.2d 226 (4th Cir.),
cert, denied,
393 U.S. 982 , 89 S.Ct. 453 , 21 L.Ed.2d 443 (1968). In
Lehnhausen v. Lake Shore Auto Parts Co.,
410 U.S. 356, 364 , 93 S.Ct. 1001, 1006 , 35 L.Ed.2d 351 (1973), Mr. Justice Douglas stressed, in the course of denying a challenge to an Illinois law imposing liability for ad valorem personal property taxes on corporations and other entities but not on individuals, that the party challenging a classification has a heavy burden “ ‘to negative every basis which might support it’ ”
(quoting from Madden v. Kentucky,
309 U.S. 83, 88 , 60 S.Ct. 406, 408 , 84 L.Ed.2d 590 (1940)).
See also United States v. Maryland Savings-Share Insurance Corp.,
400 U.S. 4, 7 , 91 S.Ct. 16, 18 (1970) (relating to a cut-off date provision in a federal tax statute).
In
Freezer Storage, Inc. v. Armstrong Cork Co.,
382 A.2d 715, 718-19 (Pa.1978), Justice Roberts, in an opinion upholding the constitutionality under the Pennsylvania Constitution of a statute similar to section 12-310,
42
wrote (at 718-19; footnote omitted):
It is manifestly rational to adjust time periods for liability for acts performed according to the substantive scope of the liability involved. The scope of liability of the class of builders differs significantly from that of the class of owners. First, the class of persons to whom builders may be liable is larger than the class to which owners may be liable. Landowners may be liable to others who come onto their land. Builders, however, may be liable both to the landowners and to others who use the land. Second, a builder may be liable for construction defects under various legal theories — contract, warranty, negligence, and perhaps strict liability in tort. Landowner liability for such defects, on the other hand, typically lies only in tort, unless the landowner is a lessor, in which case he is liable only for events occurring while the tenant is in possession. [Citation omitted.] Third, landowners can ordinarily avoid liability by taking adequate care of their land and structures and by regulating the number and type of persons entering the land and regulating the conditions of entry. The builder has no such control over his product after relinquishing it to the landowner. Landowner’s liability is also controlled by the myriad of common law rules limiting liability to such classes as “undiscovered trespassers,” “mere licensees” and so forth. Builder’s insurance and owner’s insurance structures and pricing are also different. For any of these reasons the Legislature might rationally conclude that builders should remain liable for their mistakes for only 12 years after they complete construction, but that a landowner should remain liable for injuries caused on his land for as long as he is in possession. [Citation omitted.]
Appellant also suggests that this statute is invalid because it exempts builders but not suppliers from liability twelve years after a building is completed. As amicus points out, there are no cases on whether suppliers are ever to be classed as persons “lawfully performing ... the design, planning ... or construction of [improvements to real property].” However, assuming arguendo that suppliers are not within the class of builders, the distinction drawn between the two classes is rational. Suppliers, who typically pro
*580
duce items by the thousands, can easily maintain high quality-control standards in the controlled environment of the factory. A builder, on the other hand, can pre-test his designs and construction only in limited ways — actual use in the years following construction is their only real test. Further, every building is unique and far more complex than any of its component parts. Even in the most uniform-looking suburban subdivision, each house stands on a separate plot of land; each lot may have slightly different soil conditions; one may be near an underground stream; and so forth. The Legislature can rationally conclude that the conditions under which builders work are sufficiently difficult that limitations should be placed on their liabilities, but not on the liabilities of suppliers.
The legislative history of section 12-310 shows that Congress focused upon the concerns raised by Justice Roberts. 118 Cong. Rec. 36939 (1972). Congress considered the interest of owners and third parties along with statistical studies of the distributions of claims over and during time periods. 118 Cong.Rec. 36941 (1972).
43
In sum, this Court concludes that the classifications constructed by section 12-310 are rational, and that section 12-310 does not violate any provisions of the federal constitution.
D.
Conclusion
Section 12-310 defines the point in time which initiates the running of the ten year liability period as the “date the improvement was substantially completed.” Section 12-310 further provides:
(2) For purposes of this subsection, an improvement to real property shall be considered substantially completed when—
(A) it is first used, or
(B) it is first available for use after having been completed in accordance with the contract or agreement covering the improvement, including any agreed changes to the contract or agreement,
whichever occurs first.
The legislative history and the statute itself indicate that “first use,” even when prior to completion of all the contract details, triggers the ten-year period. In this case it is stipulated that four floors of Harbin Hall were occupied on September 23, 1964. Therefore, the ten-year period expired on September 23, 1974. The alleged injury, first observed by plaintiff on September 8, 1976, more than twelve years after the initial use of Harbin Hall, did not give rise to a cause of action in tort. Because the alleged injury did not become apparent until after the ten year period had run, Georgetown never had and does not have now any cause of action in tort based on that alleged injury.
As Georgetown has no tort claims, the motions for summary judgment with regard to the tort claims stated by Georgetown against defendants Madden, Walden, Auerbach, Scullen and Marchigiani, and Beau-champ are hereby granted. For the same reasons, summary judgment on the tort claims stated against defendant Anchor, by Georgetown, will be granted even though Anchor has not formally moved for summary judgment.
44
III.
Beauchamp’s Motion for Summary Judgment as to the Construction Contract
Beauchamp has moved for summary judgment as to the claims made against it by Georgetown. For the reasons set forth in Part II,
supra,
summary judgment will be granted in favor of Beauchamp with regard to the tort claims stated against Beauchamp by Georgetown. As to the claims made against Beauchamp by Georgetown under the bond,
see
Part V hereof. In this Part of this opinion, /. e., Part III, the issues considered relate to the claims made by Georgetown against Beauchamp under the construction contract.
*581
Beauchamp contends that the construction contract between itself and Georgetown was not under seal, and that any action based on that contract is therefore barred by limitations. The parties seemingly agree that if the construction contract is not a sealed instrument, then the applicable limitations period is three years. See Md. Ann.Code, Cts. & Jud.Proc. Art. § 5-101; D.C.Code § 12-301(7). The parties seemingly further agree that if the construction contract is a sealed instrument, the applicable limitations period is twelve years. See Md.Ann.Code, Cts. & Jud.Proc. Art. § 5-102(a)(2); D.C.Code § 12-301(6). All of that is true whether Maryland or District of Columbia law is applicable.
For reasons set forth
infra,
this Court concludes that the construction contract between Beauchamp and Georgetown is not a sealed instrument, that that contract was subject to a three-year statute of limitations, and that Georgetown’s suit against Beauchamp on that contract is therefore barred by limitations.
45
Preliminarily, the question arises as to what law governs the determination of whether or not the contract is a sealed instrument. The contract was made in the District of Columbia. However, in
General Petroleum Corp. v. Seaboard Terminals Corp.,
23 F.Supp. 137, 137-38 (D.Md.1938), and
General Petroleum Corp. v. Seaboard Terminals Corp.,
19 F.Supp. 882, 884-85 (D.Md.1937), Judge Chestnut indicated that he would follow Maryland law,
i.e.,
the law of the forum, regarding what is a sealed instrument in applying the Maryland statute of limitations.
See also Alropa Corp. v. Rossee,
86 F.2d 118, 119 (5th Cir. 1936), in which the Court stated that the forum’s law would be applied to determine, in a limitations context, if the contract was sealed, though the law of the place of contracting would be applied if the question of whether the document was sealed involved a substantive right such as “the sufficiency of the instrument as title.”
The parties have all taken the position, despite the case law cited in the preceding paragraph, that District of Columbia law is applicable in considering the question of whether the construction contract between Georgetown and Beauchamp was sealed. This Court does not agree. However, the determination of whether Maryland or District of Columbia law controls in that regard is of little import herein since there seemingly are no significant differences between Maryland and District of Columbia law on the subject of what constitutes a sealed instrument.
Compare Fox-Greenwald Sheet Metal Co. v. Markowitz Bros., Inc.,
452 F.2d 1346 , 1357 n.68 (D.C.Cir.1971),
Sigler v. Mount Vernon Bottling Co.,
158 F.Supp. 234 (D.D.C.),
aff’d,
261 F.2d 378 (D.C.Cir.1958)
(per curiam),
and
Brown v. Commercial Fire Insurance Co.,
21 App.D.C. 325, 335-37 (1903) (citing Maryland law)
with Mayor and Council of Federalsburg v. Allied Contractors, Inc.,
275 Md. 151, 155-57 , 338 A.2d 275 ,
cert, denied,
423 U.S. 1017 , 96 S.Ct. 452 , 46 L.Ed.2d 389 (1975),
Gildenhorn v. Columbia Real Estate Title Insurance Co.,
271 Md. 387, 397-406 , 317 A.2d 836 (1974), and
Smith v. Woman’s Medical College,
110 Md. 441, 444-46 , 72 A. 1107 (1909).
The question of whether the construction contract involved herein was sealed has been thoroughly briefed. Additionally, this Court has heard conflicting testimony from experienced attorneys who appeared as expert witnesses with regard to custom and understanding concerning sealed instruments in the District of Columbia in 1962 or thereabout.
46
The parties have stipulated that none of the signatories of the construc
*582
tion contract between Georgetown and Beauchamp remembers the events surrounding the signing of that contract. Thus, this Court need not decide the question of whether extrinsic evidence of intent other than the above-referred-to testimony as to custom and understanding is admissible in ascertaining whether or not the parties intended the contract to be under seal as a specialty.
47
Rather, the only evidence of the intent of the parties is the contract itself in the context of modern use of seals.
48
The signature page of the construction contract between Beauchamp and Georgetown
49
discloses that the word “(Seal)” appears above the word “ATTEST:” to the left of “President and Directors of Georgetown College.” The contract is signed by Gerard J. Campbell, S.J., for Georgetown. To the left of his signature is that of Joseph A. Sellinger, S.J., secretary, and Mary Joy Shields, witness. It is over the signature of the former that “(Seal)” and “ATTEST:” appear. The corporate seal of Georgetown is impressed over the word “(Seal)” which,
*583
as indicated above, appears over the name of Fr. Sellinger, secretary.
The word “(Seal)” further appears on the left side below the signature of Ms. Shields and to the left of “Victor R. Beauchamp Associates, Inc.” The contract is signed by Edward M. Crough, President, for Beau-champ Associates. To the left of Mr. Crough’s signature is the signature of Robert C. Blatzheim, Secretary. Below Mr. Blatzheim’s signature is that of Martha Turner, witness. A corporate seal is impressed on the right side of the page over the signature of Mr. Crough.
The document submitted in this case is one of six original copies which were executed. The parties apparently have no knowledge of what has happened to the other five copies. Nor do they have any knowledge as to whether seals were affixed on one or more of those other five copies and, if so, where and how affixed.
Both parties rely upon
Sigler v. Mount Vernon Bottling Co.,
158 F.Supp. 234 (D.D. C.), aff’d, 261 F.2d 387 (D.C.Cir.1958) (per
curiam).
In that case, Judge Pine dealt with the question of whether or not a promissory note was a sealed instrument. That question was determinative in that case: if the note was sealed, limitations would not bar the plaintiff; if the note was not sealed, limitations would bar the plaintiff. Judge Pine wrote as follows (at 235-36):
The note herein was signed by defendant and its corporate seal impressed over a portion of its name. * * * The point for decision is the intention of the maker in causing its seal to be impressed on the note. Looking at the instrument itself, as I am enjoined to do, I find that it does not contain the words “signed and sealed” or words of similar import. If present, such words would be strongly indicative of an intention to create a specialty. Their absence is equally indicative of a contrary intention where, as here, a corporate seal is involved. Next, I find that a printed form of note in general use was utilized, but not one which contained the word “(Seal)” after the space for signature. This is indicative that a specialty was not intended by the maker, just as the use of a form containing the word “(Seal)” would indicate otherwise. Next, the note was made by a corporation and not an individual. The latter requires no seal for identification or as a mark of genuineness, which would be appropriate for a corporation. The presence of a seal, therefore, (either written or contained on the form used) has a connotation of intention to create a sealed instrument in the case of an individual which is not found in the case of a corporation using its own corporate seal. In the latter case, if the corporation-maker wishes some form of identification and genuineness on the note, its seal is a convenient form for that purpose. Furthermore, it is desirable, if not imperative, that a note be so drawn as to leave no doubt that the maker is the corporation bearing the name signed thereon and not someone trading thereunder. By reason of the foregoing circumstances, I am of the opinion that the intention of the maker was not to create a specialty with its attendant liability for twelve years, but that the seal was impressed for identification and as a mark of genuineness, and also to give certain knowledge that the note was an obligation of the corporation and no one else. * * *
In
Sigler,
Judge Pine (at 236) distinguished
Federal Reserve Bank of Richmond v. Kalin,
81 F.2d 1003 (4th Cir. 1936), on the grounds that
Kalin
“did not involve a corporate seal but the word ‘(Seal)’ opposite the signature of the maker.” Judge Pine also (at 236) distinguished
Wells v. Alropa Corp.,
82 F.2d 887 (D.C.Cir.1936), on the grounds that
Wells
“dealt with the note of an individual and not of a corporation.”
See also Phillips v. A & C Adjusters, Inc.,
213 A.2d 586 (D.C.1965), in which the signature of the maker of the note, an individual, was followed by “the printed word ‘(Seal).’ ” In that case, Chief Judge Hood, after writing that “[tjhere is * * * no indication in the body of the contract that it is intended to be a sealed instrument,”
id.
at 586 , nonetheless “reluctantly” held on the authority of
*584
Wells
that the contract was under seal. Chief Judge Hood further noted that “we think it may fairly be assumed that appellant [the maker of the note, who was an individual and not a corporation] was totally ignorant of the meaning or purpose of the seal” and that the interpretation of the contract in that case as sealed was “an anachronism.”
Id.
at 587.
Writing concerning sealed contracts involving a corporation — as opposed to a sealed contract signed by an individual in his individual capacity — Professor Williston has stated (1 Williston § 271A (1936) at 788-89; footnotes omitted):
The chief value of the corporate seal now is as prima facie authentication that the document is the act of the corporation and that the officers who have executed it have been thereunto duly authorized. Under the modern view this function of the corporate seal * * * must be distinguished from its use as a general seal. For example, the mere fact that the corporate seal appears on the instrument other than in the usual place of the private seal would not make the instrument a deed or specialty in the absence of a recital of affixing the seal or of extrinsic evidence showing an intention to have it serve the function of a general seal. In other words, it is a question of fact in the specific case whether the corporation has employed its corporate seal as a general seal or whether it has adopted any other permissible form of seal as convenient for the particular occasion. These general principles respecting the corporate seal apply to both private and municipal corporations.
Professor Corbin, writing on the subject of seals in general, has spoken as follows (1A Corbin §§ 241-242 (1963) at 393-97; footnotes omitted):
In executing a formal contract, the local custom and the local statute must be known and followed. It may be said that in general a document will be held to be under seal if it appears on the face of it that the party executing it intended it to be so. Among the forms of seal that are in use in most of the states are wax, a gummed wafer, an impression in the paper itself, the word “seal,” the letters “L.S.” * * *, a pen scrawl. Sometimes it has been held that the newer of these forms are not effective as a seal unless there is a witnessing clause stating that the document is under seal. * * *
It has been sometimes thought that one purpose of a seal is to identify the party executing the instrument, thereby authenticating it as his very “act and deed.”
* * ^ * sje #
Sealed documents commonly have an attesting, or “witnessing,” clause: “In witness whereof I have hereunto set my hand and seal.” Such a clause should always be included; it aids greatly in making proof of execution and in establishing the document as one under seal. But it is the attachment or adoption of the seal that is the operative fact, and not the inclusion of the testimonium clause * * *. Some cases have refused to infer the act of sealing from the mere presence of some kind of seal on the document, especially where it would be a legally operative document even if the seal were not there.
The word “(Seal)” printed beside an
individual’s
signature has been held sufficient to render the document under seal even in the absence of an attestation clause.
See Wells v. Alropa Corp.,
82 F.2d 887, 888 (D.C.Cir.1936);
Federal Reserve Bank of Richmond v. Kalin,
81 F.2d 1003, 1006-07 (4th Cir. 1936).
50
On the other hand, the mere affixing of a
corporate
seal to a contract will not necessarily render that contract under seal, as the seal may be considered merely as authenticating the corporate act.
See Sigler v. Mount Vernon Bottling Co.,
158 F.Supp. 234 (D.D.C.),
sit’d,
261 F.2d 378 (D.C.Cir.1958)
(per curiam)-, Smith v. Woman’s Medical College,
110 Md.
*585
441, 445, 72 A. 1107 (1909); 1 Williston § 271A at 788.
51
A sealed instrument is not created by accident. The intent of the parties is what controls. One element upon which courts focus in determining intent is whether the body of the contract contains language referring to a seal.
See
1A Corbin § 242 at 396-97. In
Gildenhorn v. Columbia Real Estate Title Insurance Co.,
271 Md. 387, 397-406 , 317 A.2d 836 (1974), Judge Smith stressed, in holding that certain insurance policies were specialties and subject to Maryland’s twelve-year limitations statutory provision, the importance of a recital in the instrument that the contract was under seal. In so doing, Judge Smith wrote (at 398, 402-03, 317 A.2d 836 ):
In the early law it was held that a corporation could not contract except under its corporate seal. This rule persisted, but was increasingly relaxed during the 19th century. Today, in the absence of charter or statute to the contrary, a corporation may bind itself by a writing not under seal to the same extent as an individual. As a result, the main purpose of the corporate seal now is as a
prima facie
authentication that the document is the act of the corporation and that the officers who have executed it have been thereunto duly authorized. This function of the corporate seal, however, must be distinguished from its use as a general seal. 2 S. Williston,
Contracts
§ 271A (3d ed. Jaeger 1959) (citing
General Petroleum Corp. v. Seaboard Terminals Corp., supra);
and 6 W. Fletcher,
Cyclopedia of the Law of Private Corporations
§§ 2466 and 2471 (rev. vol. Wolf 1968). The mere fact that the corporate seal appears on the instrument other than in the usual place of the private seal would not make the instrument a specialty in the absence of a recital affixing the seal or of extrinsic evidence showing an intention to have it serve the function of a general seal. In other words, it is a question of fact in any specific case as to whether the corporation has employed its corporate seal as a general seal or whether it has adopted any other permissible form of seal as convenient for the particular purpose. Williston,
op. cit.
§ 271A (citing
General Petroleum Corp. v. Seaboard Terminals Corp.,
23 F.Supp. 137 (D.Md.1938)). ******
In 7 W. Fletcher,
op. cit.,
§ 3021 (rev. vol. Wolf 1964) it is stated relative to execution of instruments by corporations:
“Instruments formerly required to be under seal ..., where a corporation is a party thereto, should designate the corporation by its proper name as a party to the instrument, and it is customary and good form, after stating the corporate name, to add ‘a corporation organized and existing under and by virtue of the laws of the state of,’ naming the state where the company was incorporated.... [T]he usual con-
*586
eluding clause, where the corporation is the grantor, is some such form as ‘In witness whereof, the said - company has hereunto caused this instrument to be executed in its name, on its behalf and under its corporate seal, by its president and secretary, this-day of_, 19_’ The name of the corporation should then be subscribed underneath, and the better form is for it to precede the names of the officers signing for the corporation, which should follow the name of the corporation, by some such word as ‘Per’ or ‘By,’ and of course the title of the office should follow the name... .
“It has been said that greater precision of form is required in case of sealed instruments than in case of simple and mercantile contracts.”
Id.
at 89-91.
Similar comment is found in 1A A. Corbin,
Contracts
§ 242 (1963). We note that 2 H. Wood,
Limitation of Actions
§ 176a(2) (4th ed. Moore 1916) likewise states:
“A recital in an unsealed instrument that it is under seal makes the instrument a sealed one for the purpose of the statute of limitations. The mere attaching of a seal after the signature does not raise the presumption that a note is a sealed instrument, unless there be a recognition of the seal in the body of the instrument by some such phrase as ‘Witness my hand and seal’ or ‘Signed and sealed;’ and, in the absence of such circumstances, the seal is regarded merely as surplusage, and the character of the note is not changed.”
Id.
at 824-25.
In
Fox-Greenwald Sheet Metal Co., v. Markowitz Bros., Inc.,
452 F.2d 1346 (D.C. Cir.1971), Judge Robinson wrote (at 1357 n.68):
The note bore Fox-Greenwald’s corporate seal but did not indicate, by recital or otherwise, that the execution of a sealed instrument was intended. In such circumstances, we accept the corporate seal only as a mark of identification and genuineness, and the twelve-year limitation on the enforcement of sealed instruments does not apply. [Citations omitted.] Rather, the three-year period applicable to “a simple contract, express or implied,” [citation omitted] governed suit on the note.
Other authorities have concluded that an attestation clause is unnecessary in order for a contract to be under seal.
See Federal Reserve Bank v. Kalin,
82 F.2d 1003 , 1006 (4th Cir. 1936); Restatement [First] Contracts § 100. Those authorities, however, seemingly refer to contracts by individuals, and not to contracts by corporations.
Beauchamp contends that a “recital clause”
(i.e.,
“signed and sealed”) is necessary and must appear in the body of the contract before that contract is under seal. While the authorities do not go so far as to indicate that a recital is
required
in order for a corporation to enter into a sealed contract, they do indicate that something more than the presence of the corporate seal is necessary, such as a recital, to render a contract a sealed instrument.
Georgetown contends that the presence of the word “(Seal)” should be a sufficient “other indication,”
Simonson v. International Bank of Washington,
312 F.2d 887, 887 (D.C.Cir.1963)
(per curiam),
to render the contract sealed. Georgetown relies on the following language from
Sigler v. Mount Vernon Bottling Co.,
158 F.Supp. at 235-36 , which involved a corporate contract:
* * *, I find that a printed form of note in general use was utilized, but not one which contained the word “(Seal)” after the space for signature. This is indicative that a specialty was not intended by the maker, just as the use of a form containing the word “(Seal)” would indicate otherwise. * * *
However, the Court did
not
say that such presence of the printed word “(Seal)” along with the imprinted corporate seal would conclusively establish that the contract was a sealed instrument. Moreover, in affirming the District Court in
Sigler,
the Court of Appeals stated: “Nowhere does the word or symbol ‘Seal’ or ‘L.S.’ appear; nowhere is
*587
there a recital that the instrument is ‘signed and sealed’.” 261 F.2d at 379. And in
Brown v. Commercial Fire Insurance Co.,
21 App.D.C. 325, 336 (1903), a case involving the question of whether an insurance policy was under the seal of the company, the Court wrote as follows:
And in such cases, where the paper does not recite that it is signed and sealed, the impression of a seal has been considered as a mere mark of genuineness and nothing more.
Jackson v. Myers,
43 Md. 452, 465 [1876],
The body of the contract here in question makes no recital to the effect that the contract is under seal. Professor Corbin stresses the importance of such a clause. 1A Corbin § 242 at 396. In
Brown v. Commercial Fire Insurance Co., supra, Gildenhorn
v.
Columbia Real Estate Title, supra,
and
Fox-Greenwald Sheet Metal Co.
v.
Markowitz Bros., Inc., supra,
the Courts focused upon the absence or the presence of any reference to the sealed nature of the instrument in the body of the contract. In
Brown ,
as early as 1903, the Court referred ( 21 App.D.C. at 336 ) to the “modern tendency” towards minimizing the old distinctions between sealed and unsealed instruments. It is apparent that the parties to the present contract could easily have more clearly specified that the contract was to be a sealed instrument. The only fact which distinguishes this case from cases such as
Brown, Fox-Greenwald,
and
Simonson
is that those cases involved contracts on which there were only impressions of corporate seals, whereas.in the within case, the word “(Seal)” appears twice on the contract. That appearance of the word “(Seal)” together with the impression of the corporate seal hardly constitute the “greater precision of form” referred to by Fletcher, as quoted in
Gildenhorn, see
p. 52
supra,
as necessary for a corporation to create a sealed instrument. Rather, reliance on those factors would seem to be a reversion to old formalities.
The only effect of concluding that the present contract is under seal would be to extend the limitations period. The validity of the contract herein does not depend upon the use of seals. While no case appears to have decided the question of whether, for purposes of determining the applicable limitations period, the use of the word “(Seal)” together with the impression of corporate seals makes a contract a sealed instrument, in the absence of a clause in the body of the contract regarding the sealed nature of the contract, it would appear that such combined use of the word “(Seal)” and of such impressions should be considered insufficient by themselves to manifest an intent to render the contract under seal, particularly where such use of the word and of such impressions would serve no purpose other than to extend the statute of limitations. Rather, such use should be viewed as serving only as an authentication of corporate action when the same is deemed desirable. The parties to the contract were sophisticated. They could easily have specifically provided by so stating in the body of the contract that the contract was under seal. They did not do so. “[I]f a corporate seal is impressed on an agreement it will remain a simple contract unless * * * the body of the contract itself indicates that the parties intended to establish an agreement under seal * *
Mayor and Council of Federalsburg v. Allied Contractors, Inc.,
275 Md. at 155 , 338 A.2d 275 . There is no such indication in the body of the contract at issue herein, and no extrinsic evidence to show an intent that the contract was to be a specialty,
id.
at 155-56 , 338 A.2d 275 . Under the circumstances, this Court concludes that the construction contract between Beauchamp and Georgetown was not a sealed contract, that the applicable limitations period was three years, and that the contract suit by Georgetown against Beau-champ based on the construction contract was therefore not timely filed. Accordingly, summary judgment will be granted for Beauchamp as to the contract claims made by Georgetown under the construction contract.
51
*588
Beauchamp also seeks summary judgment in connection with the claims against it by Georgetown under the bond. For reasons set forth in Part V of this opinion, that motion will not be granted.
IV.
The Motion to Dismiss the Cross-claim of Reliance against Beauchamp
Defendant-trustee Crough, as Trustee of Beauchamp, has moved pursuant to Federal Civil Rule 12(b) to dismiss Reliance’s cross-claim against Beauchamp. The question presented by that motion is whether Reliance (the surety) may assert a claim against Beauchamp (the principal) for indemnification and/or exoneration, in light of the conclusion of this Court that Georgetown (the obligee) may not directly sue Beauchamp under the construction contract.
52
This Court concludes that the contractual relationship between Beauchamp and Reliance and the principles of surety-ship law lead to the conclusion that Reliance may at this time assert a cross-claim or third-party claim against Beauchamp for indemnification and exoneration.
On October 24, 1963, Reliance and Beau-champ entered into a performance payment bond in favor of Georgetown. That bond provides, in relevant part, as follows:
KNOW ALL MEN BY THESE PRESENTS: That we Victor R. Beau-champ Associates * * * hereinafter called “Principal” and STANDARD ACCIDENT INSURANCE COMPANY, a Michigan Corporation, of Detroit Michigan, hereinafter called the “Surety”, are held and firmly bound unto Georgetown University, Washington, D.C., hereinafter
*589
called “Owner” in the penal sum of * * * ($2,019,619.00) * * * for the payment of which sum * * * we bind ourselves, our * * * successors, jointly and severally, firmly by these presents.
THE CONDITION OF THIS OBLIGATION is such that Whereas, the Principal entered into a certain contract with the Owner, dated the 24th day of October, 1963, a copy of which is hereto attached and made a part hereof for the construction of: Construction of Men’s Residence Hall * * *
NOW, THEREFORE, if the Principal shall well, truly and faithfully perform its duties, all the undertakings, covenants, terms, conditions, and agreements of said contract during the original term thereof, and any extensions thereof which may be granted by the Owner, with or without notice to the Surety, and if he shall satisfy all claims and demands incurred under such contract, and shall fully indemnify and save harmless the Owner from all costs and damages which it may suffer by reason of failure to do so, and shall reimburse and repay the Owner all outlay and expense which the Owner may incur in making good any default, and shall promptly make payment to all persons, firms, subcontractors, and corporations furnishing materials for or performance of labor in the prosecution of the work provided for in such contract, and any authorized extension or modification thereof, including all amounts due for materials, lubricants, oil, gasoline, coal and coke, repairs on machinery, equipment and tools, consumed or used in connection with the construction of such work, and all insurance premiums on said work, and for all labor, performed in such work whether by subcontractor or otherwise, then this obligation shall be void; otherwise to remain in full force and effect.
PROVIDED, FURTHER, that the said Surety, for value received hereby stipulates and agrees that no change, extension of time, alteration or addition to the terms of the contract or to the work to be performed thereunder or the specifications accompanying the same shall in any wise affect its obligation on this bond, and it does hereby waive notice of any such change, extension of time, alteration or addition to the terms of the contract or to the work or to the specifications.
* # # * sj« *
In addition to the performance bond, Beauchamp and Standard (of which Reliance is the successor) entered into an Agreement of Indemnity. The parties seemingly agree that no copy of that Agreement of Indemnity is available at this date. The record in this case contains no basis at this time for concluding, in the context of the issues posed by Beauchamp’s motion to dismiss Reliance’s cross-claim, that that Agreement of Indemnity would vary to any significant extent from the provisions such an agreement might reasonably be expected to contain, or that that Agreement would contain provisions which would deviate significantly from conventional suretyship principles.
53
It is to be noted that the lost agreement was seemingly entitled “Agreement of Indemnity,” implying by its title (which is all that is avail
*590
able herein) certain aspects of its contents. However, all that is known about the relationship between Beauchamp and Standard is what may be gleaned from the performance bond and the fact that the surety/principal relationship existed (and still exists).
Beauchamp contends that Reliance, as Georgetown’s surety, is the subrogee of Georgetown and that the fact that Georgetown may not sue Beauchamp directly under the construction contract bars any claim by Reliance, as subrogee of Georgetown, against Beauchamp. Reliance contends in response that the relationship between Reliance and Beauchamp is not a relationship pursuant to which Reliance’s rights are subrogated to Georgetown’s, but is rather a relationship pursuant to which Reliance is entitled to
indemnification
and/or
exoneration
54
as against Beauchamp for any claims which Georgetown may successfully assert against Reliance.
While the performance bond explicitly incorporated the construction contract between Georgetown and Beauchamp, the bond itself constitutes a contract between Beauchamp and Reliance which established a certain legal relation between those parties. The wording of the performance bond, which refers throughout to Reliance as the surety and Beauchamp as the principal, and which does
not
refer to Georgetown except at one point
55
, indicates that the relationship between Reliance and Beauchamp was the relationship of a surety to a principal. Certain rights may be implied from the very existence of that relationship. In A. Stearns, The Law of Suretyship § 11.35 at 505 (5th ed., Elder rev. 1951) (hereinafter Stearns) it is stated that “[i]f the principal makes no express promise to indemnify the one who engages to answer for his debt or default, the law will imply a promise.” The Restatement of Security § 104 comment f provides:
The surety’s right of reimbursement [i. e., indemnity
(see
Special Note following the black letter law)] is equitable in origin. Where the surety has become such at the request or with the consent of the principal even without a specific agreement for reimbursement, the surety can obtain reimbursement on the theory of a contract between principal and surety implied from the circumstances. * * *
If an obligee has no cause of action against the principal, then neither the surety nor the principal will be liable to the obligee.
See
Stearns § 11.41. Thus, in this case, if Georgetown had no cause of action for breach of the construction contract against Beauchamp, Reliance would not be liable on its performance bond, since the language of the bond itself indicates that the liability of Reliance on that bond depends upon whether Beauchamp adhered to the construction contract. Herein, Georgetown
does
have a cause of action in contract against Beauchamp for breach of the construction contract. While that cause
*591
of action is barred by limitations, see Part III
supra,
the fact that it is so barred does not mean that that cause of action of Georgetown against Beauchamp does not exist: the right exists, but the remedy does not.
56
As discussed in Part I of this opinion, the limitations period has not run on the performance bond. Thus, Georgetown may sue Reliance on that bond.
A further question which is presented is whether Reliance may cross-claim against Beauchamp for indemnification and/or exoneration, despite the fact that the period of limitations has run on the contract claim as between Beauchamp and Georgetown. That question has two parts: first, whether Beauchamp has now or ever will have any obligation to indemnify and/or exonerate Reliance, and second, whether a cross-claim by Reliance against Beauchamp is appropriate.
As was noted above, Beauchamp contends that the running of the limitations period on the construction contract between itself and Georgetown means that Beauchamp has no remaining obligation to Reliance. That contention is incorrect: Reliance will be entitled to indemnification and/or exoneration from Beauchamp if Beauchamp in fact failed to perform the construction contract.
On the subject of indemnification, Stearns spoke as follows (at § 11.35 at 505-06; footnotes omitted):
The third great equitable right of a surety is his right, on payment of the principal’s debt, to be indemnified by the principal for the loss sustained by the surety in making payment of the debt. This right, sometimes also described as a right to reimbursement or exoneration, is universally recognized. The fact that the surety may have been compensated for undertaking his risk does not in any way affect his right to be indemnified by the principal.
******
* * * [A] payment by a surety or guarantor for the account of his principal is presumed to be at the request of the latter, which raises an implied promise of reimbursement, upon which an action at law will lie for money paid to the principal’s use. * * *
And, at § 11.41 at 522-23 (footnotes omitted; emphasis added), Stearns wrote:
As a general rule, a principal owes no duty of indemnity in those cases where payment is made by his surety or guarantor upon claims for which the principal is not liable. If the principal has a defense which is not personal to him, which thus may be asserted by the surety, a failure by the surety to assert such a defense will make his payment voluntary and deprive him of the right to indemnity, provided he had knowledge of the defense. * * *
******
Where the defense is personal to the principal, such as a want of capacity to enter into the main contract, the surety will be bound even though the principal is not. In such event, the surety has no right of indemnity against the principal.
Where the principal’s defense is not available to the surety, for some reason other than the fact that the defense is personal to the principal, the surety may pay and enforce indemnity from the principal.
Where, for example, the running of the period of limitations has barred recovery from the principal, but not from the surety, the non-liability of the former
*592
does not impair the surety’s right of indemnity.
* * *
Beauchamp contends that no right of indemnity and/or exoneration exists herein because the rights of Reliance against Beauchamp are subrogated to the rights of Georgetown against Beauchamp and because Georgetown’s rights directly against Beauchamp under the construction contract are barred by limitations. In
Regents of the University of California v. Hartford Accident and Indemnity Co.,
21 Cal.3d 624 , 147 Cal.Rptr. 486 , 581 P.2d 197 (Cal.1978), a case somewhat similar on its facts to the case at bar, the surety had contended that it should be relieved of the obligations of the surety bond because the statute of limitations had run as between the principal and the obligee. Justice Tobriner rejected that contention, and stated (at 204-205, footnotes, except footnote 8, omitted)
57
:
* * * [Defendant's [surety’s] only argument for a rule of exoneration [relieving the surety of its obligations on the bond altogether] is that a surety compelled to pay after the statute of limitations has run on the principal debt is denied its right to recover from the principal as the subrogee of the creditor’s claim. The argument betrays a misunderstanding of California suretyship law. Under California decisions a surety who pays the principal debt extinguishes that obligation and thus cannot sue the debtor as subrogee of the original debt. [Citations omitted.] Subrogation in California suretyship law thus is not the surety’s primary remedy for recourse against the principal; it [subrogation] refers instead to a variety of rights which the surety may assert against third parties, cosureties, and property, most of which are unaffected by the running of the statute of limitations on the principal debt. Thus * * * the surety’s right of subrogation [is] of relatively little importance to the surety * * *.
The primary remedy that the surety can actually invoke against the principal is a suit based on the implied obligation of reimbursement. Because an action for reimbursement is a new cause of action, arising only when the surety pays the creditor, it is unaffected by the running of the period of limitation on the original debt.
8
Consequently, a rule of exoneration [relieving the surety of his obligations altogether] is not necessary to avoid impairment of the surety’s right to reimbursement.
Thus, in
Regents
the Court stated that, even though the statute of limitations had run with regard to the contract between the obligee and the principal, the surety under California law would be entitled to reimbursement (indemnification) from the principal, irrespective of the fact that the obligee could not have collected against the principal.
See id.
21 Cal.3d 624 , 147 Cal. Rptr. 486 , 581 P.2d at 212 , where Justice Clark, dissenting, stated that that was “the majority holding.”
58
Both Stearns and
Regents
indicate that the right of subrogation and the right of indemnity are two separate and
*593
distinct rights. The right of indemnity, which is implied from the fact of the surety/principal relationship, allows the surety to seek reimbursement from the principal for any payments made to the obligee where a cause of action exists as between the obligee and the principal, even when the statute of limitations would bar a direct claim by the obligee against the principal under the underlying contract. Thus, if Beauchamp breached its construction contract with Georgetown and Reliance is thus liable to Georgetown on the performance bond, Reliance may seek indemnity and/or exoneration against Beauchamp.
The fact that Reliance, if it is liable to Georgetown on the performance bond, may seek indemnification and/or exoneration does not answer the question of whether Reliance may cross-claim against Beau-champ in the case at bar prior to an adjudication that it is actually liable to Georgetown. Stearns speaks as follows (§ 11.36 at 509, 511; § 11.37 at 513-14; § 11.39 at 517; footnotes omitted):
[N]o recovery can be had by the surety against the principal on the latter’s indemnity agreement until the surety has actually suffered loss or damage under his suretyship agreement. * * * ******
* * * [Njormally the surety must first make payment of the principal’s debt before he can call on the principal for indemnity * * *.
******
An implied contract to indemnify one who pays the debt of another arises at the time the suretyship agreement is entered into * * *. The relation of debtor and creditor between the principal and the surety dates from the inception of the suretyship contract without regard to the time when the promisor pays * * *.
However, a cause of action against the principal does not arise until the promisor makes payment of the debt. * * *
A cause of action for indemnity * * * cannot arise before the maturity of the debt. * * *
It is usually held that the statute of limitations on an action by a surety for reimbursement from his principal commences to run at the time of the payment by the surety, not from the date of the maturity of the debt, on the ground that the cause of action is not on the debt itself but on the implied promise of reimbursement arising from the payment of the debt.
******
Until the surety actually pays the principal’s debt, in whole or part, he has no right to sue the principal for indemnity or reimbursement.
59
The doctrine of equitable exoneration makes the burden on the surety lighter. Stearns speaks as follows (§ 11.38 at 515-lb, footnotes omitted):
A court of equity has jurisdiction to compel the principal to exonerate the surety or guarantor at the maturity of the debt. It is not necessary that the surety have paid, or have been called upon by the creditor to pay any part of the debt. Equity grants this right in order to avoid circuity of action and to prevent irreparable harm to the surety, since the principal is ultimately liable for the obligation.
A surety cannot invoke this doctrine unless his liability is imminent and absolute. * * * Equity will go far to exonerate a solvent surety * * *.
Federal Civil Rule 13(g) provides:
A pleading may state as a cross-claim any claim by one party against a co-party
*594
arising out of the transaction or occurrence that is the subject matter either of the original action or of a counterclaim therein or relating to any property that is the subject matter of the original action. Such cross-claim may include a claim that the party against whom it is asserted is or may be liable to the cross-claimant for all or part of a claim asserted in the action against the cross-claimant.
Although Reliance has not yet been found liable to Georgetown, and thus no cause of action yet exists on the part of Reliance as against Beauchamp, the claim of Reliance against Beauchamp nonetheless fits within the language of Rule 13(g). In 3 Moore’s Federal Practice ¶ 13.34[1] at 877-78, Professor Moore wrote:
Subdivision (g) permits the assertion by way of cross-claim of “a claim that the party against whom it is asserted
is or may be
liable to the cross-claimant. .. . ” (italics added [by Professor Moore]). * * * In certain situations this may have the effect of accelerating the accrual of a right.
11
Emphases in original; footnotes 9 and 10 omitted.
The phrase “is or may be liable" appears in Rule 13(g) and also in Rule 14(a) relating to third-party claims. The scope and meaning of that phrase is discussed by Professor Moore as part of his discussion of Rule 14(a); however, the language has the same meaning in both Rules.
See
3 Moore’s Federal Practice ¶ 13.34 at 877-78 & n.10 (cross-reference to discussion of phrase “is or may be liable” in section on Rule 14(a)). Professor Moore explains the meaning of the phrase as follows (¶ 14.08 at 243-44, 246, footnotes omitted, except n.10):
As in all third-party practices, the accrual of a right is sometimes accelerated under Rule 14. Rule 14(a) authorizes impleader of a party “who is
or may be
liable.” The italicized words or their equivalent are necessary. For example, there are two kinds of indemnity: indemnity against liability and indemnity against loss. First assume that
E.F.
has agreed to indemnify
C.D.
against certain liability and that subsequently
A.B.
sues
C.D.
and the liability asserted against
C.D.
is within the indemnity agreement.
C.D.
can implead
E.F.
because under their agreement
E.F.
is immediately liable. Now assume that
E.F.
has agreed to indemnify
C.D.
against loss. Clearly
E.F.
is not liable in an independent action on his indemnity agreement until
C.D.
has suffered loss, and
C.D.
has suffered no loss merely because of the commencement of the action by
A.B.
Were it not for the italicized words,
supra, C.D.
could not implead
E.F.
By virtue of them
C.D.
is enabled to implead
E.F.,
but the substantive status of
E.F.
will not be affected. The time when C.D.’s claim is presented against him has been accelerated. But although a judgment may be obtained on the third-party claim,
C.D.
could not execute thereon until he had discharged A.B.’s judgment against him * * * so that he brings himself within his indemnity-against-loss agreement with
E.F.
******
In * * * the foregoing instances, the impleaded third party’s substantive rights are unaffected since the defendant cannot normally enforce his judgment against the third party until the judgment in the original proceeding has been paid or satisfied.
10
The applicability of the above-quoted language to the within case is apparent. Beauchamp may become liable to Reliance,
*595
because under the indemnity relationship between the two parties Beauchamp must indemnify Reliance against loss. Moreover, in this case, in which the doctrine of equitable exoneration may be applicable, Beau-champ may be required upon application to the Court by Reliance to make direct payment to Georgetown once the obligation of Reliance to Georgetown (Part I) has been ascertained by adjudication.
60
*596
The statute of limitations in Maryland, the forum state, is three years for contracts and twelve years for bonds such as the performance bond herein. If a principal were freed of its obligation to indemnify the surety by the mere fact that the statute of limitations had run as between the principal and the obligee, it could often happen that a surety would be held liable while the principal — upon whose fault the liability would rest — would be free of any possibility of liability. In other words, under the applicable limitations statutes (and in the absence of provisions in the contracts themselves to the contrary) a surety would have nine years more of potential liability than the principal it has insured. Such a construction — which is the conclusion to which Beauchamp’s arguments lead — makes little sense. Moreover, the conclusion that the statutes of limitations act so as to give a surety nine more years of liability than its principal would also mean that the statutes of limitations act to eliminate the operation of equitable principles of suretyship law when the statute of limitations has run as to the claim of the obligee against the principal but not as to the claim of the obligee against the surety. The applicable statutes of limitations certainly do not explicitly provide for any such restriction upon the operation of certain principles of suretyship law. This Court is unwilling to infer that those statutes,
sub silentio,
so provide.
If the limitations statutes are restricted to their sphere as procedural provisions and are not construed so as to prevent the operation of conventional suretyship principles, the result in this case makes good sense. The question of whether Beauchamp breached its obligations under the construction contract with Georgetown must be tried in any event. One of the purposes of statutes of limitations — to prevent the trial of stale claims — will not be violated if this Court holds that Reliance may cross-claim against or implead Beauchamp: the claims of Georgetown against Beauchamp will be equally stale (or fresh), whether or not Beauchamp remains a party to this suit. In this situation, to allow Reliance to cross-claim against or implead Beauchamp for indemnification in the event Reliance is found liable to Georgetown comports with the provisions of suretyship law and does no violence either to the principles behind limitations laws, to the language of the applicable limitations laws, or to the federal rules of civil procedure.
V.
Beauchamp’s Motion for Summary Judgment as to the Performance Bond
In Part III, Georgetown’s claim against Beauchamp under the construction contract is held barred by limitations. In Part I, Reliance’s limitations defense against Georgetown’s claim against Reliance under the bond is held lacking in merit. For the same reasons set forth in Part I, Beau-champ cannot successfully assert the bar of limitations in the face of Georgetown’s claim against Beauchamp under the bond. The question, however, arises as to whether Beauchamp is liable under the bond independently of Beauchamp’s liability under the construction contract. The answer to that question depends upon the meaning of the language of the bond
61
and the intent of the parties, /. e., Georgetown, the obligee, and Reliance and Beauchamp.
62
That intent, in this instance, is clearly revealed by the provisions of the bond, the first paragraph of which specifically provides that
*597
“we [i.e., Standard (Reliance) and Beau-champ] bind ourselves * * * jointly and severally * * Thus, the bond specifically, by its own terms, imposes liability upon Beauchamp.
It is true that in the bond Beauchamp is designated as the principal and Standard (Reliance) is designated as the surety. 21 M.L.E. “Sureties” § 21 at 10 does state that “[a] party cannot be bound as principal and surety in the same instrument,” citing to and relying upon
Wanamaker v. Bowes,
36 Md. 42 (1872). In that case, Wm. H. Wanamaker, purporting to be the agent of John Wanamaker, signed a bond on behalf of John Wanamaker as principal, and in his own behalf as surety. The bond also referred to “the above bounden W. H. Wanamaker.” The Court, after first stating that John Wanamaker was not the principal because W. H. Wanamaker lacked authority to bind John,
id.
at 56 , concluded that W. H. Wanamaker could not be “bound as principal, for it is expressly stated that he and Robert Cathcart bind themselves as
sureties,
and a party cannot be both principal and surety in the same obligation.”
Id.
(Emphasis in original). Accordingly, the bond in
Wanamaker
was deemed void.
But
Wanamaker
does not stand for the proposition that a principal is not liable on a surety bond as a
principal.
Indeed, that case did not deal with that issue. Rather, at most,
Wanamaker
held that, in meeting the formal requirements for making a bond, the same person cannot be both principal and surety.
There seemingly is no reason why the parties to a surety bond cannot, if they so desire, provide in the bond for the principal to be liable under the bond irrespective of the underlying contract. Thus, Stearns,
Law of Suretyship
§ 8.26 at 294 (Elder’s Rev. 5th ed. 1951) (footnotes omitted; emphasis added), wrote:
Where the surety’s bond binds him
jointly and severally
for the faithful performance of the obligation of the principal, the obligee may sue the surety separately without joining the principal as a party defendant, or he may proceed against one or more of several sureties, or he may sue the principal without joining any or all of the sureties. On the other hand, the obligee may, if he wishes, sue the principal and the sureties in the same action and recover a judgment against all of them.
12 Am.Jur.2d
Bonds
§ 29 at 497 (footnotes omitted) states:
Whether the obligations undertaken in a bond are joint or several depends in general upon the terms of the contract, if express, and where not express, upon the intention of the parties as gathered from all the circumstances of the case. * * * All the obligors may be sued upon a joint bond, but on a joint and several bond a creditor may sue all jointly or separately for the whole amount. Although, as between the obligors and obligees, all the obligors are principals, as between each other they may have the rights and remedies resulting from the relation of principal and surety. In a joint obligation, as well as in a joint and several obligation, each obligor who is bound at all is legally liable for the whole undertaking, and where a creditor releases one of several joint debtors, or joint and several debtors, such release to one operates as a release to all. * * *
72 C.J.S.
Principal and Surety
§ 89 at 568 (footnotes omitted; emphases added) states:
The principal and sureties may be
bound
jointly or jointly and severally. * * Each
signer
is liable for the entire indebtedness where the liability is joint and several, and an agreement by the creditor not to exact more than a proportionate share from each is not binding.
Section
245 of
that compilation, at 699, adds: “The right of the creditor to maintain an action against the principal exists independently of his rights as against the surety * *
Numerous cases cited by Am.Jur. and C.J.S. contain explicit statements that principals are liable on surety bonds. However, it must be noted that most of those cases involved -actions against sureties, rather
*598
than principals.
63
Indeed, it is probably fair to state that there are no express holdings in the case law either supporting or barring Georgetown’s right to proceed under the bond against Beauchamp as a principal.
Beauchamp argues that the purpose of the parties in using the words “joint and several” in the bond was not to provide therein for the principal’s liability, but rather to preserve the surety’s rights against the principal in the event of Beauchamp’s default. However, those words are seemingly not needed to accomplish that latter purpose, since even without them those rights of the surety apparently exist.
See, e. g., Mallis v. Faraclas,
235 Md. 109, 114 , 200 A.2d 676 (1963).
The words “joint and several” are oft used and seemingly well understood. Thus, Bouvier’s Law Dictionary 1703 (1914) states: “A liability is said to be joint and several when the creditor may sue one or more of the parties to such liability separately, or all of them together.” Beau-champ has not cited, nor has this Court found, any authority which indicates that the words “jointly and severally” have ever been interpreted so as to bar the liability of either obligor.
This is not a case in which an obligee who is prevented by limitations from preceding against the principal under the underlying contract is seeking to proceed against that principal under a surety bond which does not explicitly bind both the principal and the surety jointly and severally. Rather, this is a case in which the bond explicitly does so bind each and both of the principal and the surety and in which there is nothing stated or implied in either the underlying construction contract or in the bond to the effect that the principal’s liability under the bond cannot be asserted when the principal’s obligations under the contract cannot be enforced because of limitations.
63A
Accordingly, this Court concludes that Georgetown may proceed under the bond against Beauchamp as well as Reliance in accordance with the language of the bond itself.
VI.
The Cross-Claim of Reliance against Anchor
Reliance, in addition to cross-claiming against Beauchamp, has also cross-claimed against Anchor. Anchor was not a party to the performance-payment bond. Thus, Reliance has no claim against Anchor under that bond. But Reliance seeks as the subrogee of Beauchamp, against which Reliance has cross-claimed,
see
Part IV, to claim in Beauchamp’s shoes against Anchor.
Anchor was contractually obligated to Beauchamp. However, as all of the parties in this case agree, the Anchor-Beauchamp contract was not under seal. Since the
*599
discovery rule is not applicable in a suit stated in contract, see Part II
supra,
the applicable three-year limitations statute expired long before this case was instituted by Georgetown. Accordingly, any contract claim assertable by Beauchamp against Anchor is barred.
Any possible tort claim Beauchamp may have against Anchor is non-existent under section 12-310. See Part II
supra.
Thus, as subrogee of Beauchamp, Reliance possesses no tort claim against Anchor.
Accordingly, Reliance’s cross-claim against Anchor will be dismissed.
64
VII.
Summary of Conclusions
For the above-set-forth reasons, this Court concludes:
1. Georgetown’s contract claim against Reliance has been timely filed;
2. The tort claims asserted by Georgetown against defendants Madden, Walton, Auerbach, Seullen and Marchigiani, Beau-champ and Anchor are untimely;
3. Georgetown’s contract claim against Beauchamp on the construction contract is untimely;
4. Reliance’s cross-claim (third-party claim) against Beauchamp for indemnity and/or exoneration has been timely filed; and
5. Georgetown’s claim against Beau-champ on the performance bond has been timely filed.
6. Reliance’s cross-claim against Anchor cannot be maintained.
VIII.
Liability of Crough
If Reliance is held liable to Georgetown, and if Beauchamp is in turn held liable to Reliance, Crough, as director-trustee, will be liable to Reliance for such liability of Beauchamp, to the extent set forth by Judge Young in his Memorandum and Order dated January 27, 1978. While additional documents have been filed in this case since Judge Young decided those issues in the context of the record then before him, those additional documents do not alter the factual basis for Judge Young’s said determinations. Limitations provide no greater defense to Crough as director-trustee than to the Beauchamp corporation. Since that defense does not entitle Beau-champ to dismissal of Reliance’s claim, it does not protect Crough in the face of a claim by Reliance.
65
IX.
Application of Federal Civil Rule 54(b) and 28 U.S.C. § 1292 (b)
The judgments entered in favor of defendants Madden, Walton, Auerbach and Seullen and Marchigiani (Part II) and in favor of Anchor (Parts II and VI) are hereby constituted as “final judgments” under Federal Civil Rule 54(b). There is no just cause to delay entry of such final judgments as to those parties.
The judgments entered in Beauchamp’s favor as against Georgetown on the tort claims (Part II) and in the suit on the construction contract (Part III) are hereby constituted final judgments, since no just cause exists for delaying entry of such final judgments. Although Beauchamp may ultimately be liable to Reliance and to Georgetown on the performance bond (Parts IV and V), it will not be liable to Georgetown on the construction contract itself.
If Georgetown appeals from the above-mentioned final judgments within the applicable time limits, this Court will certify the issues decided in Parts I and V of this opinion, pursuant to 28 U.S.C. § 1292 (b). While this Court would not normally certify either of those issues for appeal, it would make sense, if the final judgments are ap
*600
pealed by Georgetown, to have the questions of whether or not Reliance and/or Beauchamp may be liable on the bond decided on appeal as well. The questions decided in Parts I and V, taken together, constitute controlling questions of law: if the rest of the questions resolved in this opinion are correctly decided, and if the results reached in Parts I and V are incorrect, then this case will be over. Thus, an appeal in connection with Parts I and V at this time has the potential for materially advancing the ultimate resolution of this case. Finally, the answers to the questions resolved in Parts I and V are not entirely obvious. In sum: (1) if this Court has not correctly decided the issues posed in Parts I and V, but has correctly determined the other issues considered in this opinion, the issues decided in Parts I and V will be controlling questions of law; (2) there is a sufficiently substantial ground for difference of opinion as to the questions decided in each and both of Parts I and V to satisfy the standards of 28 U.S.C. § 1292 (b); and (3) an immediate appeal from the Order may materially advance the ultimate determination of the litigation, particularly if Georgetown appeals from the final Rule 54(b) judgments being today entered by this Court.
Additionally, if Georgetown appeals from those Rule 54(b) judgments, this Court will also certify the issue decided by Judge Young in his Memorandum and Order dated January 27, 1978, denying the Motion to Quash Service of Process on defendant Crough.
See
Part VII
supra. If
the determinations of this Court in that regard are not correct, then Crough will seemingly be out of the case. Also, as to those issues, there is a sufficiently substantial ground for difference of opinion with regard thereto to satisfy the standards of 28 U.S.C. § 1292 (b). Further, an immediate appeal as to those issues may materially advance the ultimate determination of the litigation, particularly if Georgetown appeals from the final Rule 54(b) judgments being today entered by this Court. That is so because while the Reliance cross-claim against Beauchamp is not barred by limitations,
see
Part IV
supra,
if Crough is dismissed as a third-party defendant, the factual issues requiring resolution which are discussed in Judge Young’s said January 27,1978 Memorandum and Order will not remain for trial. Further, if Crough is dismissed as a third-party defendant and the Beauchamp corporation is an empty shell, a judgment against it may not be of any practical value to Reliance unless it leads to a successful assertion by Reliance, directly or indirectly, of liability against Mr. and/or Mrs. Beau-champ.
66
If no appeal is filed by Georgetown in connection with the final judgments entered herein, this Court will then immediately schedule the final discovery, pre-trial and trial phases of this case.
ORDER
For the reasons set forth in an opinion filed earlier today, it is hereby ORDERED:
(1) The action by Georgetown against Reliance on the performance bond was timely filed. Accordingly, the motion of Reliance for summary judgment is hereby DENIED.
(2) Georgetown has no cause of action in tort against any of the defendants herein. Accordingly, summary judgment is hereby GRANTED, with regard to the tort claims asserted by Georgetown, in favor of defendants Madden, Walton, Auerbach, Scullen and Marchigiani, and Beauchamp, and also Anchor.
(3) The action by Georgetown against Beauchamp, based on the construction contract, was not timely filed. Accordingly, the motion of Beauchamp for summary judgment, with regard to the construction contract, is hereby GRANTED.
But see
paragraph (5)
infra.
(4) The cross-claim by Reliance against Beauchamp may be stated by Reliance. Accordingly, Beauchamp’s motion to dismiss that claim is hereby DENIED.
*601
(5) The action by Georgetown against Beauchamp, based on the performance bond, was timely filed. Accordingly, the motion of Beauchamp for summary judgment with regard to the bond, is hereby DENIED.
(6) Reliance's cross-claim against Anchor cannot be maintained. Accordingly, that cross-claim is hereby DISMISSED.
(7) The Clerk is directed to enter final judgments pursuant to Federal Civil Rule 54(b) in favor of Madden, Walton, Auerbach, and Scullen and Marchigiani with regard to the tort claims.
(8) The Clerk is directed to enter final judgment pursuant to Federal Civil Rule 54(b) in favor of Anchor, with regard to the tort claims and also with regard to the cross-claim brought by Reliance against Anchor.
(9) The Clerk is directed pursuant to Federal Civil Rule 54(b) to enter final judgment in favor of Beauchamp on the tort claims brought against Beauchamp by Georgetown, and on the contract claim brought against Beauchamp by Georgetown.
(10) If Georgetown appeals to the United States Court of Appeals for the Fourth Circuit from the final Rule 54(b) judgments set forth
supra,
this Court will promptly thereafter certify certain issues to that appellate Court pursuant to 28 U.S.C. § 1292 (b) in accordance with the opinion filed earlier today in this case.
APPENDIX
THE PRESIDENT AND DIRECTORS OF GEORGETOWN COLLEGE * CIVIL N0 v. * Y-77-1438 DENNIS W. MADDEN, et al
MEMORANDUM AND ORDER
JOSEPH H. YOUNG, District Judge.
Plaintiff has sued various defendants in connnection with the alleged defective construction of Harbin Hall, a mens’ dormitory. Defendant Victor R. Beauchamp Associates, Inc. (hereinafter Beauchamp), the general contractor, is sued for negligence and breach of contract. Beauchamp is no longer in existence. Incorporated in Maryland, its charter was forfeited for nonpayment of taxes in April, 1973, and has not been revived.
By order of this Court, service of process on David Betts, the former resident agent, was quashed. Service was then made upon Edward M. Crough, Executive Vice-President and a Director at the time of forfeiture, and Martha Turner, Secretary. Both have moved to quash service of process, or in the alternative, for declaratory judgment, declaring rights, duties and legal relations in this case. Plaintiff has opposed only Crough’s motion to quash.
Martha Turner’s motion to quash service will be granted since she was not a Director when forfeiture of the charter occurred. Edward Crough’s motion to quash service will be denied, since he was a Director.
As a Director, he became a trustee of Beauchamp’s assets upon forfeiture. As trustee, he is obligated to satisfy claims which plaintiff can prove were existing debts of the Corporation upon forfeiture out of remaining corporate assets.
At common law, a dissolved corporation has no existence for any purpose. If corporate life is to continue for purposes of litigation, statutory authority is necessary.
Oklahoma Natural Gas Co. v. Oklahoma,
273 U.S. 257, 259 , 47 S.Ct. 391, 392 , 71 L.Ed. 634 (1927). Since Beauchamp was incorporated in Maryland, Maryland law determines whether it can be sued after forfeiture of its charter. Rule 17(b) F.R.Civ.P.;
Johnson v. RAC Corporation,
491 F.2d 510 (4th Cir. 1974);
Johnson v. Helicopter & Airplane Services Corp.,
404 F.Supp. 726, 729 (D.Md.1975).
Under Md.Code Ann., Corporations and Associations Article, § 3-503(c), the forfeiture of a charter for nonpayment of taxes renders all corporate powers “inoperative, null and void.” Maryland law provides for
*602
revival of forfeited charters, which validates acts done in the corporate name while the charter was void. Corporations and Associations Article §§ 3-508, 3-513.
In some jurisdictions, the fact that state law gives a right of revival has been a factor in determining that forfeited corporations may still be treated as corporations for some purposes. The corporations are seen as being in a state of suspension, but not dead.
E. g., United States v. Indian Hill Farm,
255 F.2d 282, 284 (2nd Cir. 1958);
Watts v. Liberty Royalties Corporation,
106 F.2d 941, 944 (10th Cir. 1939).
Maryland law, however, is otherwise. Despite the possibility of revival, the forfeited corporation is considered totally non-existent.
In re Hare,
205 F.Supp. 881, 884 (D.Md.1962);
Atlantic Mill & Lumber Realty Co. v. Keefer,
179 Md. 496, 499-500 , 20 A.2d 178 (1941);
Cloverfields Improvement Association, Inc. v. Seabreeze Properties, Inc.,
280 Md. 382 , 373 A.2d 935 (1977). In
Atlantic Mill,
involving forfeiture for nonpayment of taxes, the Court, quoting from Corpus Juris Secundum, stated:
After a corporation has become effectually dissolved in any mode known to the law, its power to sue or be sued, either in actions
in personam
or
in rem,
in its corporate name, is extinguished; nor can it thereafter be brought in and joined as a party plaintiff or defendant in an action brought by or against another.
179 Md. at 500 , 20 A.2d 178 . Accordingly, in Maryland no suit can be brought against a forfeited corporation, except to the extent and under circumstances specifically authorized by statute.
Under Corporations and Associations Article § 3-516, upon forfeiture the directors become trustees of the assets for purposes of liquidation.
*
§ 3-516 POWERS OF DIRECTORS ON FORFEITURE
(a)
Directors become trustees.
— When the charter of a Maryland corporation has been forfeited, until a court appoints a receiver, the directors of the corporation become the trustees of its assets for purposes of liquidation.
(b)
General powers.
— The director-trustees are vested in their capacity as trustees with full title to all the assets of the corporation. They shall:
(1) Collect and distribute the assets, applying them to the payment, satisfaction, and discharge of existing debts and obligations of the corporation, including necessary expenses of liquidation; and
(2) Distribute the remaining assets among the stockholders.
(c)
Specific powers.
— The director-trustees may:
(1) Carry out the contracts of the corporation;
(2) Sell all or any part of the assets of the corporation at public or private sale;
(3) Sue or be sued in their own names as trustees or in the name of the corporation; and
(4) Do all other acts consistent with law and the charter of the corporation necessary or proper to liquidate the corporation and wind up its affairs.
(d)
Majority governs.
— The director-trustees govern by majority vote. (1975, ch. 506).
Under the 1975 recodification of the statute, directors of voluntarily dissolved corporations have identical responsibilities and powers, pursuant to § 3-410. Article 23 § 78, the precursor of § 3-410, was substantively the same, but did not contain the limiting word “voluntary.” There was no section specifically dealing with forfeitures. The case law applied Article 23 § 78 to both forfeitures and voluntary dissolutions.
Callahan v. Clemens,
184 Md. 521 , 41 A.2d 473 (1945);
Atlantic Mills & Lumber Co. v.
*603
Keefer, supra; American-Stewart Distillery, Inc. v. Stewart Distilling Co.,
168 Md. 212 , 177 A. 473 (1935). In short, at all times relevant to this action, the directors, as trustees upon forfeiture, would have had substantially the same duties and powers now set forth in § 3-516. These include the power to “sue or be sued in their own names as trustees or in the name of the corporation.” Therefore, Edward Crough, a director at the time of forfeiture, is a proper person upon whom to serve process. His motion to quash service must be denied. Since Martha Turner was not a director, her motion to quash service must be granted.
The essential purpose of § 3-516 is to provide for liquidation. The trustees are to apply the assets “to the payment, satisfaction, and discharge of existing debts and obligations of the corporation”. (Underlining added.)
Crough, as director-trustee, has an obligation to plaintiff only if the claims can be considered an existing debt or obligation of the corporation at the time of forfeiture. In
Callahan v. Clemens, supra,
the Maryland Court of Appeals assumed, without deciding, that recovery could be had on a tort claim, brought subsequent to dissolution, although it found that limitations barred suit. The Court stated:
Dissolution occurred on February 23, 1939, and the rights of creditors became fixed at that time; the forfeiture put an end to the corporate existence. (Citations omitted.) Even if we assume, without deciding, that the complainant, on the basis of a tort claim, was a creditor of the corporation within the meaning of the statute at the time of dissolution, and that there are assets in the hands of the directors (although this is not alleged), limitations as to such a claim would seem to be a good defense, for the reasons indicated above.
184 Md. at 528 , 41 A.2d 473 .
The above language also indicates that Crough would only be liable to the extent that assets still remain. In his affidavit, he indicates that he did not receive assets as part* of liquidation and that he has not held or controlled such assets since 1970. However, even if he had no personal control, by law he is a trustee of any assets which remain.
In summary, Edward Crough, a director, can be sued in the corporate name, and can be called upon to satisfy corporate debts to the extent of the corporate assets. Tort and contract claims may be existing debts. This is the nature and extent of his obligation in this lawsuit. Whether plaintiff’s claims meet these criteria is a matter for proof.
Accordingly, it is this 27th day of January, 1978, by the United States District Court for the District of Maryland, ORDERED:
1. That Martha Turner’s motion to quash service of process be, and the same is, hereby GRANTED;
2. That Edward Crough’s motion to quash service of process be, and the same is, hereby DENIED;
3. That the motions for a hearing on the rights and obligations of Edward Crough and Martha Turner be, and the same is, hereby DENIED; and
4. That Edward Crough, as a director at forfeiture, can be sued in the corporate name and is obligated to satisfy claims which plaintiff proves existed at the time of forfeiture, out of corporate assets which remain.
1
. Georgetown is a nonprofit, educational corporation organized under the laws of the United States with its principal place of business in the District of Columbia. Defendants Madden, Walton and Auerbach (architects) are citizens of Maryland. Defendant Victor R. Beauchamp Associates, Inc. (Beauchamp) was the general contractor and is a Maryland corporation whose corporate existence was annulled in 1973 and therefore presently maintains no principal place of business. Service upon Beau-champ was made upon Edward M. Crough, a citizen of Maryland, in his capacity as one of Beauchamp’s director-trustees. The remaining two director-trustees, Mr. and Mrs. Victor R. Beauchamp, citizens of Florida, are not parties to this action. Defendant surety, Reliance Insurance Co. (Reliance) is a Pennsylvania corporation with its principal place of business in Illinois. Defendant Anchor Associates (Anchor) was the subcontractor for masonry work and is a Delaware corporation with its principal place of business in Maryland. Defendants Scullen and Marchigiani, structural engineers, are citizens of Maryland. They were added as parties defendant by a December 15, 1978 Order of this Court. The amount in controversy exceeds $10,000.
2
. The complaint is stated in five counts. Count I alleges breach of the construction contract by defendant Beauchamp. Count II charges negligence in the construction process by defendants Beauchamp and Anchor. Count III is a contract claim against Reliance and Beau-champ based upon the construction contract and the surety-payment bond provided by Standard Accident Insurance Co. (Reliance is the successor in interest to Standard). Count IV alleges negligent planning and/or supervision on the part of the architects. Count V is captioned Res Ipsa Loquitur. By Memorandum and Order dated January 12, 1978, Judge Young, to whom this case was originally assigned, interpreted Count V to allege negligence against all defendants and dismissed said count as to defendant Reliance because “[t]he involvement of Reliance is strictly contractual.” (At 10.)
3
. Defendant architects have each filed cross-claims against defendants Beauchamp, Anchor, Reliance and Scullen and Marchigiani. Defendant Reliance has filed cross-claims against defendants Anchor and Beauchamp. Defendants Scullen and Marchigiani have filed cross-claims against Beauchamp, Anchor, architects, and Reliance. Judge Young granted summary judgment for Reliance as to the cross-claims filed against it by the architects. Memorandum and Order of Judge Young, May 10, 1978. This Court granted summary judgment for Reliance on the cross-claims filed by Scullen and Marchigiani for the same reasons set forth by Judge Young. Memorandum and Order dated December 15, 1978.
A motion of defendant Crough, director-trustee of Beauchamp, to quash service of process was denied by Judge Young in a Memorandum and Order dated January 27, 1978. A copy of that Memorandum and Order is attached hereto.
See
Part VII,
infra.
Judge Young held (at 5) “[tjhat Edward Crough, as a director at forfeiture [of the corporate charter of Beau-champ], can be sued in the corporate name and is obligated to satisfy claims which plaintiff proves existed at the time of forfeiture, out of corporate assets which remain.”
Motions to dismiss filed by defendant architects and by defendant Anchor have previously been denied by Judge Young in Memoranda and Orders dated January 12, 1978 and May 15, 1978, respectively. Motions to transfer this case to the District of Columbia were also denied by Judge Young in his January 12, 1978 Memorandum and Order.
4
. Clark T. Cooper, associate in

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/1950895. Public record. Not legal advice.