Bartron v. Codington County
| Decision Date | 09 February 1942 |
| Docket Number | 8408-8410. |
| Citation | 2 N.W.2d 337,68 S.D. 309 |
| Parties | BARTRON v. CODINGTON COUNTY (two cases). CODINGTON COUNTY v. BARTRON et al. (BARTRON, Intervener). |
| Court | South Dakota Supreme Court |
Rehearing Denied March 23, 1942. [Copyrighted Material Omitted]
Davenport & Evans, of Sioux Falls, for appellant.
Alan L. Austin, of Watertown, for respondent.
The above entitled companion causes have a single factual background and confront us with common and related contentions. To avoid repetition, we have determined to dispose of the issues presented therein by a single opinion.
The facts as found by the learned trial court are not in dispute. The assignments only question the sufficiency of the facts thus found to sustain the conclusions of law and judgment. The central question of law to be determined is whether certain exhibited bargains between Codington County and the Bartron Clinic, a corporation for profit, pursuant to which such corporation furnished medical and surgical services, and medicines to the county indigent, are illegal and unenforceable.
The "Bartron Clinic" was incorporated in February of 1929, "to conduct and operate a general medical and surgical hospital and clinic and employ duly licensed physicians, surgeons, nurses, students, and other persons to carry on the business of said corporation." Its 750 shares of capital stock were originally issued and held by duly licensed physicians and surgeons, and by nurses and other employees of the corporation. During the period of time at issue in these causes, only 28 of its shares were held by Joyce H. Williams a lay person. The remaining shares were held by Dr. Bartron and Dr. Brown until 1936, and thereafter by Dr. Bartron. Joyce H. Williams was secretary of the corporation and served on its board of directors. It operated a hospital and clinic at Watertown until May 1, 1937. Thereafter, until June 15 1938, it confined itself to a general medical and surgical practice, in connection with which it furnished its patients medicine. On that date it discontinued its business, and was formally dissolved later in that year. The stockholders of the corporation were bound by formal contracts to offer their stock to the other stockholders at a price fixed therein before selling it to strangers.
Except for some minor services of an intern, all of the professional services involved herein were performed by duly licensed physicians and surgeons employed at fixed salaries by the corporation, and all charges therefor accrued to and were made by the corporation. The corporation owned all equipment used by the doctors and maintained the supply of drugs furnished patients. The corporation did not hold a license to practice medicine and surgery, nor to operate a pharmacy.
On January 3, 1933, the county and the corporation executed and delivered two contracts in writing wherein the corporation agreed to furnish hospitalization, medical and surgical services and medicine to the county for its poor persons. These contracts were renewed from year to year until 1937. In February of that year a like contract was executed and delivered between the parties to which all of the physicians employed by the corporation were added as parties. In February of 1938 a similar contract was made but was executed on the one side by Dr. Bartron. The court found that this contract signed by Dr. Bartron "was made solely for and on behalf of the corporation and with intent that the same was to be performed by the corporation." The professional services and medicines furnished the county were rendered under these contracts. The court found "that the said doctors employed by the Bartron Clinic rendered the services performed for the poor patients of Codington County, as charged for in said claims as salaried employees of Bartron Clinic, the corporation, and not otherwise, and solely for and on behalf of said corporation, and pursuant to their employment for such purpose by Bartron Clinic."
The court further found that there was not in connection with the organization of the Bartron Clinic, or at any time thereafter, any purpose or intent whatsoever on the part of Dr. Bartron or anybody else connected with said corporation to place the actual control of the practice of medicine with any person other than duly licensed physicians; that there was not at any time throughout the existence of said corporation any control, or effort to exercise control, as to the actual practice of medicine on the part of anybody other than a licensed physician and no interference, or attempted interference, by anybody other than a licensed physician, with the actual practice of medicine; that the actual purpose and intent of Dr. Bartron in promoting the organization of said corporation was to establish what amounted to a system of profit sharing, whereby the prominent and leading employees of said hospital and clinic business would have some actual interest in the success thereof.
Case No. 8408 originated as a claim before the county commissioners in aggregate amount of $3,649.63 for medicine supplied the county indigent between January 1, 1938 and September 1, 1938. The claim was allowed by the commissioners for $2,044.50. This claim involved some medicines supplied by Dr. Bartron personally after the corporation discontinued business on June 15, 1938. Upon appeal to the circuit court after a trial de novo, the circuit court disallowed the claim insofar as it included medicines furnished by the corporation. The argument presented in this particular appeal only challenges the propriety of the ruling of the court on the validity of the original claims.
Case No. 8409 originated as an action against the county on five county warrants aggregating $6,588.20 issued by the county pursuant to allowance by the board of commissioners of claims of the Bartron Clinic for professional services and medicines. The claims under which these warrants were issued included items totaling $779.10 for X-Rays, glasses, and an item of hospitalization. These items were not contested by the county. The court disallowed all other items for professional services and medicines.
Case No. 8410 originated as an action by the county to recover $47,000 paid out on claims of the Bartron Clinic for professional services and medicines furnished the poor of Codington County during six years immediately preceding the commencement of the action. The trial court found for the county and entered judgment against the defendants for $29,220.37. The findings disclose that the county received and retained the professional services and medicines for which these payments were made. The circuit court concluded that this fact did not bar the right of the county to claim full restitution.
In all of the described cases the court found that the professional services were actually rendered by duly licensed physicians, except for a small item for intern's services, and that the medicines were prescribed by such physicians in treatment of the county poor, and that all of this was done pursuant to directions and orders of the county commissioners.
The court concluded as a matter of law in each case that it is unlawful and contrary to public policy for a corporation to practice medicine or surgery and to operate a pharmacy or sell medicine without a license as required by the statutes of South Dakota. These conclusions are challenged here by appropriate assignments of error.
Is the practice of medicine and surgery for gain by a corporation prohibited by statute? That in the exercise of police powers of the state the Legislature can prohibit corporations from engaging in the business of supplying the services of licensed physicians and surgeons for gain is conceded. The question is whether the Legislature has intended to exercise the power so to do.
The statute presented for interpretation and construction, Section 7717, Rev.Code of 1919, reads as follows: "Any person who shall practice medicine, surgery, obstetrics, or any of the branches thereof in this state without having obtained a license and caused the same to be recorded as required by this article; or who shall submit to the state board of health any false, forged or fraudulent diploma, or one of which he is not the lawful owner, or any false or forged affidavit of identification, for the purpose of obtaining from such board any license required by this article; or who shall file or attempt to file with the register of deeds of any county in this state any such license belonging to another, representing the same to be his own, or any such license issued to another having the name of the person to whom it was issued erased therefrom and his own name, or the name of another, inserted in its place, or who shall falsely personate anyone to whom such license has been issued, shall be deemed guilty of a misdeameanor."
The section originated as part of Chapter 109 of the Session Laws of 1913. At the times in controversy that act had been re-enacted as a part of the Revised Code of 1919. Our references are to the revision.
The act created a state board of health with power to license and regulate the practice of medicine and surgery within this state, as well as with other powers related to the public health. Sections 7663 and 7667, Rev.Code of 1919. "Any person desiring to engage in the practice of medicine surgery or obstetrics in any of their branches" was directed to make application to that board for a license and it was provided that a "license shall be granted to any applicant who shall give satisfactory proof of being at least twenty-one years of age, of good moral character, *** upon compliance with the following conditions: ***." The conditions set forth included the passing of...
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