Welborn v. Dixon ( 1904 )

Opinion. We do not deem it necessary to consider the assignments of error in detail, but will state the principles that will dispose of all the exceptions.

We will first consider whether there was error in overruling the demurrer to the first cause of action. A complaint is not subject to demurrer if its allegations show that the plaintiff is entitled to any relief whatever, even though it may be different from that to which the plaintiff supposes he is entitled. Ladson v. Mostowitz,45 S.C. 388, 23 S.E., 49; Strong v. Wier, 47 S.C. 307,25 S.E., 157; Conner v. Ashley, 49 S.C. 478, 27 S.E., 473. When the allegations of the complaint are appropriated to more than one cause of action, the remedy is not by demurrer (if any of the allegations are sufficient to constitute a cause of action), but is thus stated in Cartin v. Ry. Co.,43 S.C. 221, 20 S.E., 979: "If two causes of action were set forth in the complaint without being separately stated, the defendant, it is true, had the right to make a motion that the complaint be made more definite and certain; or if allegations were made which were unnecessary to sustain the cause of action stated in the complaint, to make a motion to strike out such allegations as irrelevant and as surplusage. Pom. R. R.R., secs., 447 and 451. If the defendant waived said objections by failing to make such motions, then the plaintiff had the right to the relief to which all the allegations showed he was entitled. The plaintiff, where the allegations of the complaint are appropriate to either of the two causes of action, may be required upon motion of the defendant to make his election as to the cause of action upon which he will proceed to trial." CitingWestlake v. Farrow, 34 S.C. 270, 13 S.E., 469; Hammond v. R.R., 15 S.C. 10, and Hellams v. Switzer, 24 S.C. 39. Under such circumstances, this Court will not undertake to say what particular cause of action the plaintiff has attempted to set forth, and to which he should be confined in determining the sufficiency of the complaint. This would be an election of remedy by the Court instead of the plaintiff. The case of Cartin v. R.R., supra, has been affirmed in a number of subsequent cases, the most recent of which isMarion v. Charleston, 68 S.C. 257.

The words in the agreement, "deed back," show that it had reference to the land which had been conveyed by the plaintiff to the defendant, and as the description of the land could be made certain by referring to that conveyance, the agreement was not subject to the objection set forth in the ground of demurrer numbered "1." That must be regarded as certain which can be made certain.

We do not, however, regard this question of vital importance; for even if said agreement was too indefinite, the complaint would not be demurrable on that ground, as the land which the complaint alleges was conveyed by the plaintiff to the defendant, by way of mortgage, to secure the payment of a loan, is particularly described in the first paragraph of the complaint. Even if there was no written agreement for a reconveyance, the plaintiff would be entitled to a reconveyance upon showing that the deed was intended as a mortgage, and that he had complied with his part of the contract. These facts could be shown by parol testimony. Brownlee v. Martin, 21 S.C. 392.

We will next consider the nature of the complaint. There are allegations of the complaint that the defendant committed a breach of the contract. The appellant, however, contends that this is not sufficient to constitute a cause of action, by reason of the fact, that the complaint does not allege damages arising from thebreach of the contract. We do not take appellant's view of the fact that the complaint doesn't allege damages arisingex contractu. The complaint alleges that the plaintiff sustained damages to the amount of $2,000. This allegation has reference to all the wrongful acts of the defendant set forth in the complaint, including the alleged breach of contract. Furthermore, it is at least questionable, whether it was necessary to allege specifically such damages as were the direct and natural result of the alleged wrongful act, when they are claimed in the demand for relief. Levy v.Legg, 23 S.C. 282; Norris v. Clinkscales, 47 S.C. 488,25 S.E., 797. In an ordinary action for damages arisingex contractu, the plaintiff is only entitled to recover such as are the direct, natural and proximate result of the breach of the contract. Sitton v. Macdonald, 25 S.C. 68. The allegations of the complaint that the plaintiff and the defendant entered into the contract therein set forth, and that the defendant committed a breach thereof from which the plaintiff suffered damage, were, in themselves, sufficient to constitute a cause of action.

There are allegations also not only appropriate to an ordinary action for damages arising ex contractu, but showing that the breach of contract was accompanied by a fraudulent act. In the case of Lee v. Lee, 11 Rich. Eq., 574, the Court quotes with approval the following language from Russell v. Southard, 12 How., 139: "To insist on what was really a mortgage as a sale is, in equity, a fraud, which cannot be successfully practiced under the shelter of any written papers, however precise and complete they may appear to be." Under the allegations of the complaint it was a fraudulent act on the part of the defendant, when he intentionally disposed of the land as the owner thereof, knowing that it was conveyed to him by way of mortgage, and that it belonged to the plaintiff (but, of course, subject to the mortgage).

The question, then, is presented, whether in an action arising out of a breach of contract, attended with a fraudulent act, the defendant is liable for examplary damages. There is no doubt as to the general principle, that in an action for breach of contract the motives of the wrongdoer are not to be considered in estimating the amount of damages, and that he is only liable for such damages as are the natural and proximate result of the wrongful act. When, however, the breach of the contract is accompanied with a fraudulent act, the rule is well settled, certainly in this State, that the defendant may be made to respond in punitive as well as compensatory damages. In a note, on page 214 of Sedgwick on Damages (3d ed.), the author recognizes that punitive damages are recoverable in this State. He says: "In South Carolina the question has been discussed at large, and the grounds distinctly taken, that even in cases of assumpsit, damages will be given on the ground of fraud." He then comments on the case of Rose Rodgers v. Beattie, 2 N. McC., 538. Commenting on the text (which states a different rule from that prevailing in this State), that author, in a note on page 217, says: "I am far from desiring to express any opinion in favor of the doctrine of the text; on the contrary, if the plaintiff in an Anglo-Saxon court of justice shall ever be permitted to state his complaint according to the actual facts, and not be compelled to use an unmeaning formula, I can see no reason, greatly as legal relief would be thus extended, why examplary damages should not be given for a fraudulent or malicious breach of contract, as well as for any other wilful wrong. Damages are given by the civil law in many cases of this kind. So they are in Louisiana, the jurisprudence of which State is very much fashioned on the great Roman original." Since the distinction in forms of action has been abolished, there is stronger reason for allowing examplary damages in actions for breach of contract, attended with fraudulent act, than when the case of Rose Rodgers v. Beattie, 2 N. McC., 538, was decided.

In Rose Rodgers v. Beattie, 2 N. McC., 538, an action of assumpsit was brought to recover damages upon the sale of cotton alleged to have been fraudulently and falsely packed, by wetting the cotton in the centre of the bales. It was sent to Liverpool and sold as sound cotton at the then current price. After the sale, the fraud was discovered, and the cotton returned and resold as damaged, at a considerable loss. The defendants contended that if liable at all, the plaintiffs could only recover the price paid at Charleston, with interest. The Court said: "Assumpsit is nomen generalissimum, under which a great variety of special cases are embraced. It includes every case by simple contract, whether in the nature of a warranty, a promise to pay money, or an undertaking to do or perform any act, from whence a promise, either express or implied, can arise. The damages to be recovered must always depend upon the nature of the action, and the circumstances of the case. The difference of opinion which seems to exist on the subject, I apprehend has arisen from confounding the distinctions between the different forms of assumpsit. In an action for money had and received, the actual amount of money received with interest in some cases should be the measure of damages. In an action for goods or any specific chattel sold and delivered, the value of the thing sold; and so on, in all other cases which furnish a standard by which the jury can be governed. But in cases of fraud, and other cases merely sounding in damages, the jury may give a verdict to the whole amount of the injury sustained or imaginary damages. * * * In Bacon it is said: ``if there are any circumstances of hardship, fraud or deceit, the jury may consider of them, and proportion and mitigate the damages as they please.' 2 Bacon Tit. Damages. And Lord Mansfield says: ``that fraud alone may be ground for an assumpsit; where there is no express undertaing, as where a person sells property as sound knowing it to be otherwise.' Stewart v.Wilkins, Doug., 18." After commenting on certain cases, the Court uses this language: "I apprehend that, after all these cases, it can no longer be considered (as has been somewhat confidently asserted in this case), that (even) vindictive damages may not be given in an action of assumpsit; and surely it will not be denied that the plaintiff may recover the amount of the loss which he has actually sustained." See, also, Garrett v. Stuart, 1 McC., 514.

In D'Orval v. Hunt, Dudley, 180, it was held that for the breach of an executory contract, without fraud or imposition, the jury can only give such damages as fairly and naturally result from it, and which can be measured by a pecuniary standard, thus showing that the measure of damages is different when there is fraud.

The allegations of the complaint are also appropriate to an action of tort, committed with a fraudulent and malicious intent. The following definition of a tort is set forth in 26 Enc. of Law, 72 (1st ed.): "The word tort means nearly the same thing as the expression civil wrong. It denotes an injury inflicted otherwise than by mere breach of contract; or, to be more nicely accurate, a tort is one's disturbance of another in rights which the law has created, either in the absence of contract or in consequence of a relationwhich a contract had established between the parties (italics ours). The complaint alleged a tort when it stated that the defendant sold the land which he held as a security for the repayment of the loan in consequence of the relation which the contract had established between the parties. The further allegation that the tort was committed with a malicious and fraudulent purpose, made the defendant liable for examplary damages as well as actual damages. Chiles v.Ry., 69 S.C. 332.

The next question for consideration is whether the second cause of action set forth in the complaint was subject to demurrer. The only question that has not been disposed of, in considering the first cause of action, is whether the defendant became liable under the allegations of the complaint for the proceeds of the land. The allegations of the complaint show that the defendant occupied a fiduciary relation in regard to the land and that the sale thereof was in violation of his trust. The plaintiff, therefore, had the right, either to follow the land or the proceeds of the sale, just as in other cases when the trustee sells the trust estate in violation of the trust. In order, however, that the proceeds arising from the sale of the land may be declared to be impressed with a trust, it will be necessary to invoke the aid of the Court in the exercise of its chancery powers, as the legal title to the land was in the defendant. In such case, punitive damages cannot be awarded on the equity side of the Court. Bird v. R.R., 8 Rich. Eq., 46;Busby v. Mitchell, 29 S.C. 447, 7 S.E., 618.

It is the judgment of this Court, that the judgment of the Circuit Court be affirmed.