Chapman v. City Council of Charleston , 28 S.C. 373 ( 1888 )

The opinion of the court was delivered by

Mr. Justice McIver.

The only question raised by this appeal is whether the Circuit Judge erred in overruling the oral demurrer to the complaint, based on the ground that the complaint does not state facts sufficient to constitute a cause of action. The complaint is quite long, and need not be inserted in full in this opinion, though a copy of it should be incorporated in the report of the case, for a full understanding of all the details. It will be sufficient to state here that the object of the action is to make the City Council of Charleston liable for allowing an illegal transfer of certain certificates of city stock, in which the plaintiffs claim they are entitled to an interest.

The only papers incorporated in the record submitted to us are the complaint, the decree of the Circuit Judge, and the exception of appellants. From these we learn that the only ground upon which the demurrer was urged before the Circuit Judge was that the action was for a tort and that, in the absence of any statute imposing such liability, a municipal corporation is not liable to such an action. The Circuit Judge held, however, that “the complaint alleges a state of facts which shows a liability on the part of the said defendant, growing out of a contract and an illegal transfer to others of the evidences of the debt due on the contract; such transfer having been made by the officers of the defendant corporation.” He therefore held that the action was “for the specific delivery of certain city stock so illegally transferred, or for an account for the same, and is not one of those actions in which a municipal corporation is not liable.”

He accordingly rendered judgment overruling the demurrer, and from this judgment the City Council of Charleston appeal upon the following grounds : 1st. That his honor erred in not dismissing the complaint herein, on the ground that this defendant, being a municipal corporation, is not liable in an action like' this, in the absence of an act of the general assembly giving such right of action. 2nd. That his honor erred in not holding that, if any liability existed, it was on the part of the officers of the city making the transfer, and that the doctrine of respondeat superior does not apply.

The counsel for appellants, in his argument here, has endeavored to sustain his demurrer upon grounds other than those presented to or decided by the Circuit Judge, and other than those presented in his exceptions. Under the well settled rules and practice of this court we are not at liberty to consider such grounds. The questions presented by these additional grounds do not appear to have been considered or determined by the Circuit Court, and therefore they present nothing for us to review. It is true, that this court has in many cases affirmed the judgment of the Circuit Court upon other grounds than those upon which it was based in that court; but this court has never undertaken to reverse a judgment upon a ground not taken in the Circuit Court or in the exceptions, unless it be for want of jurisdiction, which, as has been frequently held, may be taken at any time. The cases of State v. Penny, 19 S. C., 218, and Segler v. Coward, 24 S. C., 122, were both cases of jurisdiction.

We may say, however, that even if these grounds had been properly taken, we do not think they would have been sufficient to sustain the demurrer. The first, presenting an objection to the want of sufficient distinctness in the complaint, in referring to the appellants, is more properly a ground for a motion to make the allegations of the complaint more specific and definite rather than a ground for demurrer. The second and third, based on the want of a specific description of the certificates of stock and the failure to allege demand, even if conceded to be valid objections to an action for the specific delivery of the certificates of stock (as to which we say nothing), were certainly not sufficient to sustain a demurrer to an action calling on appellants to account for the value of the stock illegally transferred.

The real question then is, whether the action must be regarded as an action of tort to which a municipal corporation is not liable. It will be observed that the cases of Coleman v. Chester, 14 S. C., 286; Black v. Columbia, 19 Id., 412, and Young v. Charleston, 20 S. C., 116, cited by appellants to show that a municipal corporation cannot be made liable for a tort (to which may be added the case of Gibbes v. Beaufort, 20 S. C., 213), "were all cases in which it was sought to make a municipal corporation liable for tort by reason of some malfeasance or misfeasance in the performance of a public duty, imposed upon it as a governmental agency of the State. But whether a municipal corporation can be made liable for a tort committed by its authority, by reason of some malfeasance or misfeasance in the performance of some duty not of a public, but of a private, nature, a duty which it does not owe to the public generally, but one which it has assumed to a private individual, is a question which has not been argued, and which we are not now prepared to decide.

We will therefore proceed to consider the question whether this action must be regarded as an action of tort. We agree with the Circuit Judge that it is not to be so regarded. It is stated in the complaint that each of the certificates of stock contained a provision “that the debt evidenced thereby was recorded in and transferable only at the office of the city treasurer by appearance in person or by attorney, according to the rules and form instituted for that purpose.” This provision necessarily implies an agreement on the part of the corporation that no other mode of transfer of the stock will be recognized by the corporation; and if there has been, as alleged, a breach of such contract, an action for the damages sustained thereby would be an action arising out of contract, and not an action of tort.

Again, in the case of Magwood v. Railroad Bank, 5 S. C., 379, an action like this was sustained, not upon the ground of tort, but upon the ground that a corporation “is bound to protect the title of a cestui que trust, under a trust of its stock declared upon its books, against the exercise of powers forbidden by or inconsistent with the nature and terms of such trust.” It is true that the corporation sued in that case vras not a municipal corporation, but, so far as the question we are considering is concerned, that can make no difference. If, as alleged in the complaint, the stock was illegally transferred by the executors of the will, under which plaintiffs claim, such transfer was a breach of trust by the executors; and if, as is also alleged in the complaint, the transfer could only have been made with the co-operation of appellants, acting through their officers appointed for the purpose, then the appellants would be participants in such breach of trust, and as such liable in equity to account to the cestui que trust. It seems to us, therefore, that the action need not necessarily be regarded as an action of tort, and that the Circuit Judge committed no error in overruling the demurrer.

As to the second ground of appeal, it would be sufficient to say that the question there presented does not seem to have been raised in the Circuit Court, but we may add that even if properly raised, it could not be sustained. A corporation can act only through its officers or agents, and the corporation is liable for the acts of such officers or agents within the scope of their authority.

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