City of Dayton v. Trustees of Speers Hospital

• Decision Date: 26 May 1915
• Citation: 165 Ky. 56,176 S.W. 361
• Parties: CITY OF DAYTON v. TRUSTEES OF SPEERS HOSPITAL. [a1]
• Court: Kentucky Court of Appeals

176 S.W. 361

165 Ky. 56

CITY OF DAYTON v. TRUSTEES OF SPEERS HOSPITAL. ^[a1]

Court of Appeals of Kentucky.

May 26, 1915

Appeal from Circuit Court, Campbell County.

Action by the City of Dayton against the Trustees of Speers Hospital. Judgment for defendants, and plaintiff appeals. Affirmed.

Hubbard Schwartz, of Newport, for appellant.

Kelly &amp Regenstein, of Newport, for appellees.

HURT J.

This is an appeal of the city of Dayton, Ky. from a judgment rendered by the Campbell circuit court, in an action by the city against J. O. Jenkins, John L. Phythian, and W. E. Senour trustees of the Speers Hospital, in which the city sought to procure a decree of sale of the hospital in satisfaction of taxes assessed against it by the officials of the city for the years 1910 and 1911. The defense offered by the appellees was that the hospital was an institution of purely public charity, and the case resulted in a judgment dismissing the petition of appellant. The case was tried upon an agreed statement of facts, which are, in substance, that the taxes for the benefit of the city were regularly levied upon the hospital for the years mentioned, in the first of which years the taxable value at which it was assessed was $28,000, and the second year $38,000, and the whole amount sought to be recovered was $1,100.50, as taxes due from it to the city for the years mentioned. The hospital was founded by funds set apart for that purpose by the will of Elizabeth L. Speers who died in 1894, and whose will was duly probated October 20, 1894. The item of the will which set apart the funds for the erection and maintenance of the hospital, after providing that the various specific legacies devised in the will to various persons should be paid, and all costs and expenses incident to the settlement of her estate--

"conveyed and transferred the entire balance of her estate, real personal, and mixed, of every kind, wherever situated, to Dr. B. K. Rachford, Dr. C. B. Schoolfield, and William C. Pickering, as trustees, in trust, for the establishment and maintenance of a hospital in the city of Dayton, Campbell county, Kentucky. Said hospital to be erected and maintained, and conducted in such a manner, and upon such plan as, in their judgment, would do the greatest good. Said trustees shall annually report all of their acts and doings to the highest court in said county, having original equitable jurisdiction, and all vacancies in said trustees shall be filled by said court. Said court shall require from said trustees proper bonds, for the performance of their duties, and it may allow them annually, out of the trust funds, a just and fair compensation for their labor," etc.

In pursuance to the trust thus created, the trustees and their successors erected the hospital at a cost of about $72,000 which left real estate of the value of $14,200 situated in Ohio, which also passed into the hands of the trustees. The receipts of the hospital, with the rents of the property in Cincinnati, were not sufficient to pay its operating expenses, and its doors were closed, but in 1901 the present trustees were appointed, and they applied to the Campbell circuit court for permission to borrow $6,000 to pay its debts, and $2,000 additional with which to make needed repairs. The trustees borrowed the $8,000 from J. J. Ellerhorst, and thereafter they borrowed from Ellerhorst $2,250 additional, making $10,250, to secure which they gave a mortgage for that sum upon the real estate situated in Cincinnati, Ohio; and, while the income from that property did not quite pay the interest on the Ellerhorst mortgage, he accepted same in full satisfaction of it. In 1909 it became necessary to provide a more commodious and convenient building for the nurses at the hospital, and the trustees again applied to the Campbell circuit court and received permission to borrow $20,000 for that purpose, and to secure it by a mortgage upon the hospital itself. $16,453.36 of this fund was expended in erecting the necessary additional building, and the remaining $3,546.64 was put in the treasury of the hospital, and used to pay accumulated debts and the operating expenses of the institution. There was another debt of $1,000 due one Langendorfer, incurred in building the nurses' addition to the hospital, and Langendorfer had secured his claim by filing a mechanic's lien upon the hospital property, and to satisfy this claim the circuit court authorized the trustees to place another mortgage upon the property for that sum, which was done in 1912. The average number of patients cared for in the hospital each day in 1910 was 33, of which number 19 were private patients and 14 public patients, and the average number of patients cared for in 1911 each day was 27, of which number 14 were private patients and 13 were public patients. In the year 1910 the city of Dayton sent to the hospital and paid for 21 patients, who remained there an aggregate of 358 days, and in 1911 it sent 21 patients to the hospital, who remained an aggregate of 432 days. Private patients are those who enter the hospital and pay from their own resources for their room, board, and nursing, and pay the physician for professional services rendered them directly. The profit, if any, derived from the care of these private patients, for their rooms, board, and nursing, goes into the general fund of the hospital, and is used for maintaining the hospital. Public patients are described as those who come of their own accord, or are sent by the authorities of the cities of Dayton, Bellevue, and Newport, and Campbell county. All public patients are received and treated in the public wards. No patients are kept in the hospital without charge, but some patients who come of their own accord fail to pay their bills. All public patients receive medical attention at the hands of the members of the hospital staff free of charge to them, and one interne is on duty at all times, and his services are also given to the patients. The hospital trustees serve and have always served without compensation. When the hospital first began operation a number of rooms were furnished by charitably inclined persons and organizations, and since that time other rooms have been furnished in a similar manner. The hospital each year receives from various sources charitable contributions in the way of beds, towels, furniture, food supplies, and...