The plaintiff placed goods in the hands of an auctioneer in the
City of Alexandria, who sold the same and became insolvent, having
neglected to pay over the proceeds of the sales to the plaintiff.
The auctioneer was licensed by the Corporation of Alexandria, and
the corporation had omitted to take from him a bond with surety for
the faithful performance of his duties as auctioneer. This suit was
instituted to recover from the Corporation of Alexandria the amount
of the sales of the plaintiff's goods lost by the insolvency of the
auctioneer, on an alleged liability in consequence of the
corporation's having omitted to take a bond from the
auctioneer.
The power to license auctioneers and to take bond for their good
behavior, not being one of the incidents to a corporation, must be
conferred by an act of the legislature, and in executing it, the
corporate body must conform to the act. The Legislature of Virginia
conferred this power on the mayor, aldermen, and commonalty of the
several corporate towns within that commonwealth, of which
Alexandria was then one,
"provided that no such license should be granted until the
person or persons requesting the same should enter into bond with
one or more sufficient sureties, payable to the mayor, aldermen,
and commonalty of such corporation."
This was a limitation of the power.
Though the corporate name of Alexandria was "the mayor and
commonalty," it is not doubted that a bond taken in pursuance of
the act would have been valid.
The act of Congress of 1804, "An act to amend the charter of
Alexandria," does not transfer generally to the common council the
powers of the mayor and commonalty, but the powers given to them
are specially enumerated. There is no enumeration of the power to
grant licenses to auctioneers. The act amending the charter changed
the corporate body so entirely as to require a new provision to
enable it to execute the powers conferred by the law of Virginia.
An enabling clause, empowering the common council to act in the
particular case, or some general clause which might embrace the
particular case, is necessary under the new organization of the
corporate body.
The common council granted a license to carry on the trade of an
auctioneer, which the law did not empower that body to grant. Is
the town responsible for the losses sustained by individuals from
the fraudulent conduct of the auctioneer? He is not the officer or
agent of the corporation, but is understood to act for himself as
entirely as a tavern keeper or any other person who may carry on
any business under a license from the corporate body.
Is a municipal corporation, established for the general purposes
of government, with limited legislative powers, liable for losses
consequent on its having misconstrued the extent of its powers in
granting a license which it had no authority to grant without
taking that security for the conduct of the person obtaining the
license which its own ordinances had been supposed to require, and
which might protect those who transact business with the persons
acting
Page 28 U. S. 399
under the clause? The Court finds no case in which this
principle has been affirmed.
That corporations are bound by their contracts is admitted. That
money corporations, or those carrying on business for themselves,
are liable for torts is well settled. But that a legislative
corporation, established as a part of the government of the
country, is liable for losses sustained by a nonfeasance, by an
omission of the, corporate body to observe a law of its own in
which no penalty is provided is a principle for which we can find
no precedent.
The act of Virginia, passed in 1792, authorizes a defendant to
plead and demur in the same case.
This was an action on the case brought by the plaintiff in error
against the defendants in the circuit court for damages charged to
have been sustained by the plaintiff in consequence of the neglect
of the defendants to take due bonds and security from one Philip G.
Marsteller, licensed by them as an auctioneer, for the years 1815,
1816, 1817, and 1818, according to the alleged provisions of the
statute in that behalf enacted.
The declaration and pleadings are fully stated in the opinion of
the Court. The defendants filed a general demurrer and pleaded the
general issue.
The counsel for the plaintiff objected to the defendants'
demurring and pleading at the same time to the declaration, but the
court overruled the objection, conceiving that it had a right to
permit such a course of proceeding under the statute of Virginia,
which is in these words:
"The plaintiff in replevin, and the defendant in all other
actions, may plead as many several matters, whether of law or fact,
as he shall think necessary for his defense."
The court then proceeded to consider the matters of law arising
upon the demurrer, and decided that the declaration and the matters
therein contained were not sufficient in law to maintain the
plaintiff's action, and the plaintiff prosecuted this writ of
error.
Page 28 U. S. 403
MR. CHIEF JUSTICE MARSHALL delivered the opinion of the
Court.
In December, 1796, the General Assembly of Virginia passed an
act entitled "An act concerning corporations," declaring
"That from and after the passing thereof, the mayor, aldermen,
and commonalty of the corporate towns within the said commonwealth,
and their successors should, upon request of any person desirous
thereof, grant licenses to exercise, in such town, the trade or
business of an auctioneer, provided that no such license should be
granted until the person or persons requesting the same should
enter into bond with one or more sufficient sureties, payable to
the mayor, aldermen, and commonalty of such corporate town and
their successors in such penalty and with such
Page 28 U. S. 404
condition as by the laws and ordinances of the town shall be
required."
In the year 1779, the Town of Alexandria was incorporated by the
name of "The Mayor and Commonalty of the Town of Alexandria." The
corporation consisted of the mayor, recorder, aldermen, and common
councilmen.
The mayor, recorder, and aldermen and their successors were
constituted justices of the peace, with power to appoint
constables, surveyors of the streets and highways, and to hold a
court of hustings once in every month and to appoint clerks, a
sergeant, and other proper officers.
In the year 1800, the mayor and commonalty passed an ordinance
"for licensing auctioneers agreeably to an Act of the general
assembly passed on 22 December, 1796," by which it was enacted
that
"The mayor and commonalty shall grant to any person or persons
during the same a license to exercise the trade or business of an
auctioneer within the town, provided that no such license shall be
granted until the person or persons applying shall enter into bond,
with one or more good securities, in the sum of $20,000, payable to
the mayor and commonalty and conditioned for the payment of the
annual rent of $500 to the mayor and commonalty in quarterly
payments for the said office and for the due and faithful
performance of all the duties of the same, which bond shall not
become void on the first recovery, but may be put in suit and
prosecuted from time to time by and at the costs of any person
injured by a breach thereof, until the whole penalty shall be
recovered."
In 1804, Congress passed an act "to amend the charter of
Alexandria," in which provision was made for the election of a
common council. The judicial duties of the mayor, recorder, and
aldermen having been transferred to the Circuit Court of the United
States for the County of Alexandria, it was enacted that the common
councils elected "and their successors shall be, and hereby are
made a body politic and corporate by the name of the Common Council
of Alexandria." The estate, &c. vested in the mayor and
commonalty was transferred to the common council, and the usual
Page 28 U. S. 405
corporate powers to sue and be sued &c., to erect
workhouses, &c., to provide for the police of the town,
&c., were conferred on that body. They were authorized
"to appoint a superintendent of police, commissioners and
surveyors of the streets, constables, collectors of the taxes, and
all other officers who may be deemed necessary for the execution of
their laws, who shall be paid for their services a reasonable
compensation, and whose duties and powers shall be prescribed in
such manner as the common council shall deem fit for carrying into
execution the powers hereby granted."
The twelfth section enacts
"That so much of any act or acts of the General Assembly of
Virginia as comes within the purview of this act shall be and the
same is hereby repealed, provided that nothing herein contained
shall be construed to impair or destroy any right or remedy which
the Mayor and Commonalty of Alexandria now possess or enjoy to or
concerning any debts, claims, or demands against any person or
persons whatsoever or to repeal any of the laws and ordinances of
the mayor and commonalty of the said town now in force which are
not inconsistent with the act."
In June, 1817, the Common Council of Alexandria passed "An act
to amend the act for licensing auctioneers, and for other
purposes," in the following words:
"Be it enacted by the Common Council of Alexandria that every
person or persons obtaining a license to exercise the business of
an auctioneer within the Town of Alexandria shall annually apply
for and obtain a renewal of his or their license and shall also
annually renew his or their bonds for the same in the manner
provided by law, and every person failing to renew such license and
give bond annually shall cease to exercise the business of an
auctioneer and shall be proceeded against accordingly."
The declaration, after reciting the act of 1796, and the several
ordinances of the corporate body of the Town of Alexandria, charges
that
"The Common Council of Alexandria, on the ___ day of _____, in
the year 1815, in the Town of Alexandria, did grant a license to
one Philip G. Marsteller, to exercise the trade and business of an
auctioneer within the said town, for the term of one year, and at
the expiration
Page 28 U. S. 406
of the said year did renew the said license to the said Philip
G. Marsteller for one other year, and did continue to renew the
said license from the end of the said last mentioned year, from
year to year, until the ___ day of _____, in the year 1819, during
all which time, that is to say, from the ___ day of _____, in the
year 1815, to the ___ day of _____, in the year 1819, he, the said
Philip G. Marsteller, did exercise the trade and business of an
auctioneer, in the said Town of Alexandria under the said license
and authority of the said common council, and that during the
period aforesaid, the said plaintiff delivered to him, the said
Philip G. Marsteller, sundry goods, wares, and merchandise, to be
sold by him at auction in the said Town of Alexandria, and that the
said Philip did, from time to time, during the period he so carried
on the trade of an auctioneer, under the license aforesaid, sell at
auction the said goods, &c., so delivered to him by the
plaintiff, to the amount of $1,583.09, which said sum, the said
Philip, though often requested, failed to pay to the said
plaintiff."
The declaration then states
"That a judgment was obtained against the said Philip for the
said sum, which he was totally unable to pay, by means of which
premises the plaintiff became entitled to the benefit of the bond
and security, which ought to have been taken by the common council
previous to granting the said license to exercise the trade of
auctioneer as aforesaid. Yet the defendants, not regarding their
duty in that behalf, but contriving to deceive and injure the
plaintiff, did not, and would not take any bond and security as
aforesaid from the said Philip G. Marsteller during the time when
the transactions aforesaid took place, but on the contrary so
carelessly, negligently, and improperly conducted themselves in the
premises that by and through the negligence, carelessness, and
default of the defendants, no bond and security was taken from the
said Philip, and that the money due from the said Philip was wholly
lost to him, the said plaintiff, to his damage $3,000."
To this declaration the defendants filed a general demurrer and
at the same time pleaded the general issue.
The counsel for the plaintiff objected to receiving at the
Page 28 U. S. 407
same time a demurrer and a plea to the whole declaration, but
the court overruled the objection under the act of assembly which
is in these words:
"The plaintiff in replevin, and the defendant in all other
actions, may plead as many several matters, whether of law or fact,
as he shall think necessary for his defense."
The court having sustained the demurrer and entered judgment for
the defendants, the plaintiff has brought the cause by writ of
error into this Court.
The power to license auctioneers and to take bonds for their
good behavior in office, not being one of the incidents to a
corporation, must be conferred by an act of the legislature, and in
executing it, the corporate body must conform to the act. The
Legislature of Virginia conferred this power on the mayor,
aldermen, and commonalty of the several corporate towns within that
commonwealth, of which Alexandria was one,
"provided that no such license should be granted until the
person or persons requesting the same should enter into bond, with
one or more sufficient securities, payable to the mayor, aldermen,
and commonalty of such corporation."
This was a limitation on the power.
Though the corporate name of Alexandria was "the mayor and
commonalty," it is not doubted that a bond taken in pursuance of
the act would have been valid. Jones 261.
In the year 1800, when the Corporation of Alexandria determined
to act upon this law, an ordinance was passed authorizing "the
mayor and commonalty" to grant licenses to auctioneers, provided
that no such license should be granted, until bond with sufficient
sureties should be given, payable to "the mayor and commonalty." It
may well be doubted whether this ordinance is sustained by the
legislative act in pursuance of which it was made. That act
authorized "the mayor, aldermen and commonalty" to grant licenses
to auctioneers, first taking bonds payable to the "mayor, aldermen
and commonalty." The ordinance omits the "aldermen" both in the
clause which empowers the body to grant licenses and in that which
names the obligees in the bond.
But supposing this difficulty to be entirely removed, we
Page 28 U. S. 408
are next to inquire whether the powers to grant licenses to
auctioneers and to take bonds for the performance of their duty,
which were given by the act of 1796 to the mayor, aldermen, and
commonalty, and by the ordinance of 1800 to the mayor and
commonalty, have been transferred to and vested in the Common
Council of Alexandria.
This depends on the act of Congress, passed in 1804, "to amend
the charter of Alexandria." Under this instrument, the corporate
body consists of the common council alone. The mayor is separated
from them, and the aldermen are discontinued. The power of the
mayor and commonalty are not transferred generally to the common
council, but the powers given them are specially enumerated. We do
not find in the enumeration the power to grant licenses to
auctioneers. If it could be maintained that the repealing clause
does not comprehend the act of 1796, still the act amending the
charter changes the corporate body so entirely as to require new
provisions to enable it to execute the powers conferred by that
act. The corporate body is organized anew, and does not retain
those parts which are required for the execution of the act of
1796. An enabling clause empowering the common council to act in
the particular case or some general clause which might embrace the
particular case is necessary under the new organization of the
corporate body. It has been already said that we find no particular
provision, and the general powers granted are so limited by the
language of the grant, that they cannot be fairly construed to
comprehend the subject of licenses to auctioneers.
It may be admitted that the ordinance of 1800 is not repealed by
the act amending the charter. But that ordinance is not adapted to
the new corporate body, and could not be carried into execution by
the common council, till modified by some act of legislation.
The common council took up this subject in 1817, and passed the
act recited in the declaration. We are relieved from inquiring
whether this act removed or could remove the difficulties which
have been stated, by the circumstance that the declaration changes
the nonfeasance, which is the
Page 28 U. S. 409
foundation of the action, as commencing in the year 1815. We do
not think any law then existed which empowered the Common Council
of Alexandria to license auctioneers or to take bonds for the
faithful performance of their duty. The injury alleged in the
declaration as the foundation of the action is the omission to take
the bond required by law. Now if the common council was not
required or enabled by law to take a bond, the action cannot be
sustained.
If the declaration is to be considered as stating the cause of
action to be the granting a license without previously requiring a
bond, it will not, we think, help the case. The common council has
granted a license to carry on the trade of an auctioneer, which the
law did not empower that body to grant. Is the town responsible for
the losses sustained by individuals from the fraudulent conduct of
the auctioneer? He is not the officer or agent of the corporation,
but is understood to act for himself as entirely as a tavern
keeper, or any other person who may carry on any business under a
license from the corporate body.
Is a municipal corporation, established for the general purposes
of government, with limited legislative powers, liable for losses
consequent on its having misconstrued the extent of its powers in
granting a license which it had not authority to grant without
taking that security for the conduct of the person obtaining the
license which its own ordinances had been supposed to require, and
which might protect those who transacted business with the person
acting under the license? We find no case in which this principle
has been affirmed.
That corporations are bound by their contracts is admitted; that
money corporations, or those carrying on business for themselves,
are liable for torts is well settled. But that a legislative
corporation established as a part of the government of the country
is liable for losses sustained by a nonfeasance, by an omission of
the corporate body to observe a law of its own, in which no penalty
is provided, is a principle for which we can find no precedent. We
are not prepared to make one in this case.
In permitting the defendant below to demur and plead to the
Page 28 U. S. 410
whole declaration, the circuit court has construed the act on
that subject as it has been construed by the courts of
Virginia.
There is no error, and the judgment is
Affirmed with costs.
This cause came on to be heard on the transcript of the record
from the Circuit Court of the United States for the District of
Columbia, held in and for the County of Alexandria, and was argued
by counsel, on consideration thereof, it is ordered and adjudged by
this Court that the judgment of the said circuit court in this
cause be and the same is hereby affirmed with costs.
