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June 11, 1958


The opinion of the court was delivered by: Legge, Justice.

   June 11, 1958.
Victoria Squires was a patient in the Mullins Hospital from March 22, 1955 through December 4, 1956. On December 15, 1956, the hospital commenced an action against her in the Court of Common Pleas for Dillon County for its charges, in the amount of $6,751.00, attaching to the complaint an itemized and verified statement thereof. In its first paragraph, the complaint alleged that "The Mullins Hospital, the above named plaintiff, created and established pursuant to the authority of an act of the General Assembly of South Carolina, approved March 26, 1923 (33 Stat. at Large, 758), and amendments thereto, including an act approved May 14, 1955 (49 Stat. at Large, 1214), is and was at the times herein stated a political subdivision of Marion County, South Carolina, engaged in the operation of a public hospital for the benefit of the public health and benevolent and charitable purposes, its property being held and operated for said purposes by a commission charged with its direction and management". On December 20, 1956, Victoria Squires died; and by proper order the action was continued against the administrator of her estate. He answered, alleging that he was without information sufficient to form a belief as to the allegations of the first paragraph of the complaint, and denying the alleged indebtedness. By way of affirmative defense, he alleged; that Victoria Squires, a deaf mute, had, in some manner unknown to the defendant, sustained a fracture of the hip about the time of her entry into the hospital on March 22, 1955, for a routine physical examination that should have required her to remain there only a day or two; "that the plaintiff, its agents, servants, employees or nurses failed or neglected to discover that the said Victoria Squires had sustained this injury, and provided no care and no treatment which would have aided and enabled her to recover and reduce the period of hospitalization"; and that the prolonged period of her hospitalization and treatment, entailing the charges claimed in the complaint, resulted from said negligence on the part of the plaintiff, its agents, servants, employees or nurses.

Plaintiff demurred to "the entire answer" and, in the alternative, to the affirmative defense before mentioned. In both aspects, the demurrer was upon the ground that neither "the entire answer", nor the affirmative defense considered alone, stated facts sufficient to constitute a defense to the action, for the reason that there was, in neither, a sufficient denial of the allegation that the plaintiff was a political subdivision of Marion County, engaged in the operation of a public hospital for the benefit of public health and benevolent and charitable purposes.

The defendant thereupon moved for leave to file "an amended answer and counterclaim". The notice of the motion makes no reference to the nature or contents of the proposed "amended answer and counterclaim", but it is apparent from the circuit judge's order hereinafter mentioned that the proposed counterclaim was to be in tort, for damage sustained by Victoria Squires as the result of the negligence alleged in the answer. Apart from the plaintiff's claimed immunity from tort liability, a counterclaim for wrongful death could not have been interposed in this case. Cf. Complete Auto Transit, Inc., v. Bass, 229 S.C. 607, 93 S.E.2d 912.

The demurrer and the motion were argued before the Honorable J. Woodrow Lewis, Judge of the Fourth Judicial Circuit; and from his order of December 28, 1957, overruling the former and granting the latter, the plaintiff has appealed.

The Mullins Hospital was erected and established pursuant to an act of the General Assembly of South Carolina approved March 26, 1923 (XXXIII Stat. at L. 758). By that act the County Commissioners of Marion County were authorized and empowered to issue and sell bonds "for and on behalf of Reaves Township of said county * * * for the purpose of purchasing a site, erecting and equipping a hospital in said township to be located at Mullins, South Carolina", etc. For the purpose of carrying out its provisions, the act created a five-man commission, to be known as the Mullins Hospital Commission, naming its first members and providing that vacancies should be filled by appointment by the Governor "from the qualified electors of Reaves Township, upon the recommendation of the majority of the Legislative delegation from said county." The act conferred upon this commission authority to purchase a site and erect and equip the hospital, and charged it with "the direction and management of all the affairs pertaining to said hospital". It also made provision for the holding of an election on the question of the issuance of the bonds for the purchase of the site and the erection and equipping of the hospital. The election having resulted favorably, an action was then brought to enjoin the issuance and sale of the bonds upon the ground that the act of March 26, 1923, above referred to, was unconstitutional; and the decree of the circuit court holding the act valid, refusing the injunction, and dismissing the complaint, was affirmed by this court. Battle v. Willcox, 128 S.C. 500, 122 S.E. 516.

Section 4 of the 1923 act authorized the commission "to contract with some reliable person or persons, firm or corporation, for the operation of said hospital, either by lease or otherwise: Provided, They shall not have the power to make any contract that will place any expenses for the operation and running of said hospital upon the taxpayers of Reaves Township". By the act of March 14, 1927 (XXXV Stat. at L. 966), there was added to this section a proviso to the effect that the hospital should not be leased for longer than five years at an annual rental of less than $1,200.00. The 1927 act was repealed in 1930 (XXXVI Stat. at L. 1919).

By act approved March 13, 1931 (XXXVII Stat. at L. 885), the Mullins Hospital Commission was authorized to accept, without cost to the taxpayers of Reaves Township, a conveyance of the nurses' home adjoining the hospital, and all of the equipment belonging to Dr. L.M. McMillan in the hospital and in the nurses' home. That act further empowered the Hospital Commission to operate the hospital through a competent superintendent to be employed by the commission, or to contract by lease or otherwise for its operation, as it might deem best, provided that no expense for the operation of the hospital should be placed upon the taxpayers of Reaves Township. It also made provision that vacancies in the membership of the commission should be filled by the qualified electors of Reaves Township at an election publicly advertised, the name or names of the person or persons receiving the majority of the votes cast to be certified to the Marion County legislative delegation and by it recommended to the Governor for appointment; and further provided for geographical distribution of the commission's membership, so that at no time more than three members should be residents of the town of Mullins.

Further amendment was by the act of March 2, 1934 (XXXVIII Stat. at L. 2105), whereby it was provided that the Mullins Hospital Commission should consist of nine members, of whom not more than seven should be residents of the town of Mullins; that they should hold office for four years and until the appointment and qualification of their successors; and that they should be chosen in the manner specified in the act of March 13, 1931.

By the act of February 19, 1947 (XLV Stat. at L. 1331), the original act (of March 26, 1923) was amended so as to provide that any surplus on hand from taxes, after the retirement of the bonds issued under Section 5 of the 1923 act, should be paid by the Treasurer of Marion County into the "Mullins Hospital Fund", to be used for further building purposes.

And finally, by an act approved May 14, 1955 (XLIX Stat. at L. 1214), The Mullins Hospital was expressly classified as and declared to be "a political subdivision of Marion County".

Appellant lists nine exceptions and states six "Questions Involved"; but there are actually only three issues that we need determine, and we think they will come into clearer focus if they are considered in the order below stated, to wit:

      1. Was it error to overrule the demurrer to "the entire
      2. Should the defendant be permitted to amend his
   answer by adding thereto the proposed counterclaim in
      3. Was it error to overrule the demurrer to the affirmative
The demurrer to "the entire answer" was in truth directed to the first, or negative, defense. At least we shall so consider it; for as to that defense an issue is presented wholly different from that raised by the demurrer to the affirmative defense. The latter involves the question of plaintiff's immunity to a defensive claim based on alleged negligence of its agents; no such question is really involved in the demurrer to the negative defense, which was, we think, properly overruled. It was grounded, as we have said, upon the contention that that defense contained no sufficient denial of the allegation (complaint, par. 1) of plaintiff's political and charitable status. It is true, of course, that a defendant's mere denial that he has knowledge or information sufficient to form a belief as to the plaintiff's corporate capacity does not put that fact in issue. Bank of Enoree v. Yarborough, 120 S.C. 385, 113 S.E. 313; Clanton's Auto Auction Sales, Inc., v. Campbell, 230 S.C. 65, 94 S.E.2d 172. But in his first, or negative, defense, the defendant, admitting that the decedent had entered the hospital on the date alleged in the complaint, categorically denied the allegations of paragraph 2 wherein the plaintiff had alleged that it had thereafter cared for, maintained and attended to her as its patient to the extent that she had become indebted to it in the amount claimed. By that denial the obligation of the decedent, and of her administrator, to the plaintiff, was clearly in issue, regardless of the latter's political or charitable status.

Plaintiff's resistance of the motion for leave to amend the answer by setting up a counterclaim for damages is based upon the contention that it is immune from liability in tort by virtue of its status as "a political subdivision of Marion County, engaged in the operation of a public hospital for the benefit of public health and benevolent purposes". The double aspect of this contention may be eliminated; for if the plaintiff's claim of immunity may soundly be rested upon its status as a political subdivision or governmental agency, whether or not it is also immune as a charitable corporation will become an academic question.

The common-law rule denying liability of municipal corporations in tort was an offshoot of the old maxim "the King can do no wrong", and of its corollary that the sovereign may not be sued without its consent. The municipality, being an agency of the sovereign, was accorded like immunity, at least against actions based upon negligence in the performance of governmental functions. In this country, various reasons for the rule have been stated from time to time, the more recent cases grounding it upon a public policy that opposes diversion of public funds to the payment of private damages. 38 Am Jur., Municipal Corporations, Section 573, pp. 265 et seq. In many jurisdictions the courts have drawn a distinction between municipal activities that are governmental and those that are in the field of business rather than of government and are loosely referred to as proprietary. But no such distinction is made in this state; all functions exercised by municipal corporations under powers constitutionally granted to them by the General Assembly are considered public and governmental. Irvine v. Town of Greenwood, 89 S.C. 511, 72 S.E. 228, 36 L.R.A., N.S., 363; Looper v. City of Easley, 172 S.C. 11, 172 S.E. 705; Carter v. City of Greenville, 175 S.C. 130, 178 S.E. 508; Hill v. City of Greenville, 223 S.C. 392, 76 S.E.2d 294; Sammons v. City of Beaufort, 225 S.C. 490, 83 S.E.2d 153. Accordingly, it has long been the settled law of this state that, except as expressly permitted by statute, municipalities are immune from liability for the negligence of their agents or servants. This immunity is not restricted to counties, cities and towns, but extends as well to governmental agencies in general. Mullinax v. Hambright, 115 S.C. 22, 104 S.E. 309; Brooks v. One Motor Bus, 190 S.C. 379, 3 S.E.2d 42; Sanders v. State Highway ...

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