City of Raleigh v. Trustees of Rex Hospital
| Decision Date | 02 May 1934 |
| Docket Number | 383. |
| Citation | 174 S.E. 278,206 N.C. 485 |
| Parties | CITY OF RALEIGH et al. v. TRUSTEES OF REX HOSPITAL et al. |
| Court | North Carolina Supreme Court |
Appeal from Superior Court, Wake County; Grady, Judge.
Suit by the City of Raleigh, in behalf of itself and of all citizens of the municipality, including the sick and afflicted poor of the City of Raleigh, and another, against Trustees of Rex Hospital and others. From a judgment for defendants plaintiffs appeal.
Affirmed.
This is an action to restrain and enjoin the defendants from consummating a loan of money by the Public Works Administration, an agency of the government of the United States of America, to the corporate defendant, and from executing a mortgage or deed of trust on property, real or personal, owned by the corporate defendant, for the purpose of securing the payment of said loan in accordance with the terms set out in the complaint, on the ground that the corporate defendant is without power to consummate said loan and to execute the said mortgage or deed of trust.
The action was begun on March 14, 1934. At the trial, judgment was rendered as follows:
"This cause coming on to be heard before the undersigned, Henry A. Grady, Judge Presiding over the Courts of the Seventh Judicial District, at the Regular March Term, 1934, of Wake County Superior Court, and a jury trial having been waived and it having been agreed between D. Staton Inscoe Attorney for the plaintiffs, and Thos. W. Ruffin, Attorney for the defendants, that the Court might hear the evidence, find the facts and render judgment; and evidence having been offered by both the plaintiffs and the defendants, and the Court having heard the argument of counsel, the following facts are found to be true:
1. This action was instituted by the City of Raleigh, a municipal corporation, in behalf of itself and all of its citizens, and by Graham Waddell, a person found by the Court to be one of the sick and afflicted poor of the City of Raleigh, in behalf of himself and all other persons residing in the City of Raleigh belonging to the class of sick and afflicted poor of said City of Raleigh, against the Trustees of Rex Hospital, a corporation, and the individual members of the Board of Trustees of said hospital; and the court finds that all persons interested in this controversy, who are necessary and proper parties for a determination of the questions presented, are before the Court, and represented by counsel.
2. This action was brought for the purpose of securing a restraining order against the defendants, prohibiting and enjoining them from consummating a loan on the lands and property belonging to the defendant corporation from the P. W. A. Loan Corporation, a Department of the United States Government, and the pleadings filed herein will disclose the purpose for which the action was instituted and the contentions of the parties.
3. During the month of February, 1839, John Rex, of the County of Wake, died, leaving a Last Will and Testament, which was duly probated and recorded in Will Book 24, at page 261, in the office of the Clerk of the Superior Court of Wake County, which Will is here referred to and incorporated as a part of this finding of fact.
Under the provisions of said Will, the said John Rex devised to the Trustees of Rex Hospital a twenty-one acre tract of land adjoining the City of Raleigh, and certain personal property, in trust for the purpose of erecting and endowing a hospital; that said Will does not restrict in any manner the power of the Trustees therein provided for to alienate or encumber said property; nor does it prohibit either expressly or impliedly the borrowing of money by said Trustees and the pledging of said property as security therefor.
4. The General Assembly of North Carolina duly passed an Act, authorizing the Commissioners of the City of Raleigh to appoint the Trustees named in said Will, subject to the approval of the Supreme Court of North Carolina, said Act being found in the Private Laws of 1840-41 of North Carolina, c. 6; the original Trustees of Rex Hospital, after a full investigation, according to the records hereinafter referred to, found that the twenty-one acre tract of land devised to them under said Will was unsuitable for a hospital site or for hospital purposes; and thereupon they petitioned the Court of Equity, at the October Term, 1892, of Wake County Superior Court, to allow said original Trustees of Rex Hospital to sell the original 21 acre tract of land and to use the proceeds therefrom in the purchase of other property and erect a hospital thereon. In said proceeding the Court, after a full consideration of the matter, entered a judgment approving the sale of said 21 acre tract of land, which judgment is recorded in Judgment Docket #7, p. 171, C. I. Docket #5318, and Minute Docket 1892, page 546, in the office of the Clerk of Superior Court of Wake County, N. C., which records are hereby referred to and incorporated as a part of this finding of fact.
5. The sale of said 21 acre tract of land produced approximately $10,000, which money, together with private contributions made by various citizens of Wake County, was used in the year 1899 in the erection and equipment of the institution on South Street in the City of Raleigh, Wake County, North Carolina, known as Rex Hospital. The site of the present hospital was purchased from a charitable organization known as St. John's Guild of the City of Raleigh, and the deed from St. John's Guild to the Trustees of said Rex Hospital amounted to a conveyance in fee simple, without any restrictions whatever, upon the power of alienation or of encumbering said property; said deed appears of record in Book 124, at page 179, in the office of the Register of Deeds of Wake County, and the said record is hereby made a part of this finding of fact.
6. At the present time the total investment, including lands, buildings and equipment, constituting the institution known as Rex Hospital, amounts to $222,090.00, of which investment the sum of only $10,000.00 was derived from the Estate of John Rex. That various private donors, including the City of Raleigh, have invested in said institution known as Rex Hospital, the sum of $212,090.00 as against the trust fund of $10,000.00 acquired under the Will of John Rex, deceased; and said fund of $10,000.00 derived from the Estate of John Rex is merely nominal in comparison with funds contributed from other sources.
7. The expense, maintenance and upkeep of said Rex Hospital has been paid almost in its entirety through the patronage of pay patients, entering said hospital, and being sent there by the majority of the physicians of the City of Raleigh, who have consistently patronized said hospital in an effort to keep the same a going concern. That in spite of the patriotic patronage and support given it by said physicians, and by the citizens of the City of Raleigh, needing medical attention, said hospital has been hardly able to exist. The building of said hospital is old and dilapidated, and unsuitable at this time for the practice of modern medicine and surgery; and the Court finds as a fact that as a result of said depreciated condition, and the inability of the defendant corporation to provide the necessary equipment for the treatment of patients, many of the best patients, residing in the City of Raleigh, have sought hospitalization elsewhere, to the great detriment and loss of the defendant institution. During the past five year period the Court finds that only forty-six per cent of the patients cared for in said hospital were pay patients. That in addition to funds derived from these pay patients the City of Raleigh and the Duke Foundation have donated approximately $25,000.00 per annum towards the operation and upkeep of said hospital; and in spite of these generous donations, and owing to the facts hereinbefore and hereinafter found, said hospital is hardly able to exist under present conditions, and will probably not continue to exist unless its pay patients can be retained and increased; and unless material aid can be had from some source, said institution will cease to operate and those poor and destitute people of the City of Raleigh, for whom the original donation under the Will of John Rex was intended, will lose the benefit thereof.
8. The defendant corporation, acting through its Board of Trustees, finds itself faced with the dire necessity of improving the physical property and adding new and up-to-date equipment to said institution; and it is found as a fact that if said Board of Trustees is prevented from securing the aid and assistance referred to in the Answer said institution will soon cease to function and the entire property belonging to said corporation will escheat to the University of North Carolina, as provided by law; not only will the small trust fund of $10,000.00, donated by John Rex be forfeited, but also the tremendous sum of $212,000.00 contributed by the public generally and the City of Raleigh will be lost insofar as the beneficiaries named in the Will of John Rex are concerned.
9. Facing the dire necessity of improving its property or forfeiting its trust, the Board of Trustees of Rex Hospital applied to the United States Government, through its subsidiary, the said P. W. A. Loan Corporation, for a loan of $350,000.00, the proceeds of which are to be used exclusively in erecting new buildings, or remodelling the present building of Rex Hospital, and adding thereto such new and up-to-date equipment as may be required for the protection and care of the sick and afflicted poor of the City of Raleigh, including such pay patients as may be encouraged to patronize said hospital under a modernized and up-to-date equipment; and the United...
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