Cohen v. General Hospital Soc. of Connecticut

• Decision Date: 16 April 1931
• Citation: 154 A. 435,113 Conn. 188
• Court: Connecticut Supreme Court
• Parties: COHEN v. GENERAL HOSPITAL SOC. OF CONNECTICUT.

154 A. 435

113 Conn. 188

COHEN v. GENERAL HOSPITAL SOC. OF CONNECTICUT.

Supreme Court of Errors of Connecticut.

April 16, 1931

Appeal from Superior Court, New Haven County; Carl Foster, Judge.

Action by Leo Cohen against the General Hospital Society of Connecticut to recover damages for personal injuries alleged to have been caused by the negligence of the defendant. Demurrer to second and third defenses of answer was overruled, and judgment was rendered in favor of the defendant, and plaintiff appeals.

Error and cause remanded.

Argued before MALTBIE, C.J., and HAINES, HINMAN, BANKS, and AVERY JJ.

Joseph I. Shrebnik, of New Haven, for appellant.

Frederick H. Wiggin and Frank E. Callahan, both of New Haven for appellee.

BANKS J.

The complaint alleged that the plaintiff entered the premises of the defendant for the purpose of calling for his wife who had been a patient at the hospital and was discharged, that it became necessary for him to carry her from the hospital building to his waiting automobile, and that in doing so he tripped over an iron pipe which had been negligently placed and permitted to remain close to the exit of the building, and sustained personal injuries.

The defendant, in its second defense, alleged that it was a public charitable corporation specially chartered by the state for the purpose of maintaining a general hospital for the relief of the poor and suffering, and that all its property and income was held in trust for and devoted to that particular charitable use. In a third defense it repeated the allegations of the second defense and further alleged that the plaintiff's wife was admitted to the hospital at the request of the plaintiff and herself, and that the plaintiff agreed to pay and did pay the regular hospital charges for her care and treatment which were less than the cost to the defendant of such care and treatment. The plaintiff demurred to these defenses on the ground that the facts therein stated did not constitute a defense to the plaintiff's cause of action, and the trial court overruled the demurrer. The correctness of this ruling is the only question upon this appeal.

In the defenses demurred to the defendant claims immunity from liability for injury resulting to the plaintiff from its negligence upon the ground that it is a charitable institution, and the demurrer to these defenses raises the vexed question of the extent of the liability in tort of an eleemosynary corporation.

One of the grounds upon which the defendant bases its claim to immunity from liability is that it is a state institution performing public governmental functions, and therefore exempt from liability upon the same theory that limits the liability of a municipal corporation for its acts in the performance of a governmental duty. The second defense alleges that the defendant was chartered by a Special Act of the General Assembly in 1826 (1 Sp. Acts 1826, p. 343), which is made a part of this defense and which enacted that certain persons, named therein, and such others as might from time to time be associated with them for the purpose of establishing and maintaining a general hospital in New Haven, and their successors, " be, and they hereby are, incorporated for said purpose, and made a body politic, by the name of ‘ The General Hospital Society of Connecticut,’ and by that name shall be capable of suing and being sued, pleading and being impleaded, and may purchase, hold, sell and convey estate, real and personal, to an amount not exceeding fifteen thousand dollars, to be holden by said society at any one time; may have a common seal, and the same may alter and change at pleasure, and may make and execute such by-laws and regulations, not contrary to the laws of this State or of the United States, as shall be deemed necessary for well ordering and conducting the concerns of the society." Section 1. This act created a private corporation dedicated to the purpose of general and public charity. The defendant is a public charity in the popular significance of the term; the benefits it bestows are public, but its organization and management are private. Zollman, American Law of Charities, § 472; 13 Ruling Case Law, 939. Though it receives aid from the state in the way of exemption from taxation, and by state appropriation toward its support, it is not a state institution, and in its operation is not acting as an agency of the sovereign. It is not therefore entitled to immunity on the ground that it is an arm of the government engaged in the performance of a public governmental duty.

The defendant makes the further claim that, as a charitable institution, its funds are held in trust for the particular charitable purposes for which they were given, that it is a breach of trust to apply such funds to any other purpose that payment of damages in tort actions is not a purpose contemplated by the trust, and that therefore such funds cannot be diverted to the payment of such damages. A charitable corporation, which is not a state institution engaged in the performance of a governmental duty, is not entitled to immunity from liability for its tortious acts because of the public character of the charity it dispenses. It is a private corporation capable of suing and being sued like any other corporate entity. Nor does the fact that its funds are held in trust free it from such liability. Being a corporation organized for charitable purposes it is of course bound to apply its corporate funds to such purposes only, and holds them under a quasi trust arising from such restriction. In this respect it does not differ, however, from any business corporation whose officials are bound to hold and apply its property only for the purposes for which the corporation was organized. The relationship of a corporation-whether eleemosynary or otherwise-to its corporate property is not that of a strictly legal trustee to his trust funds. Even in that relationship " the trust fund is protected from immediate levy to satisfy the execution, not because of its complete immunity, but rather from technical reasons connected with the legal estate of the trustee in the property. Its technical immunity affords it no ultimate protection. *** The merely technical immunity of a private trust fund from execution upon a judgment recovered in an action of tort affords no reason for the real immunity of the funds of a charitable corporation." Powers v. Massachusetts Homeopathic Hospital (C. C. A.) 109 F. 294, 300, 65 L.R.A. 372. Such immunity from liability for its tortious acts or those of its employees as may be claimed by a charitable corporation must be based, neither on the public character of its charity nor on the fact that its funds are held in trust, but upon its eleemosynary character. And such is the rationale of the decisions in those jurisdictions in which the so-called " trust fund theory" is adopted. It is said that public policy forbids the crippling or destruction of charities, which are established for the benefit of the whole public, to compensate an individual member of the public for injuries inflicted by the negligence of the corporation or its servants or agents, and that it is better that the individual should suffer injury without compensation than that the public be deprived of the benefit of the charity. Vermillion v. Woman's College of Due West. 104 S.C. 197, 88 S.E. 649. The fundamental question then, raised by this claim of the defendant, is one of public policy. If the alternative were that stated by the South Carolina court, whether the individual should suffer injury without compensation or the public be deprived of the benefit of charity, plansible reasons might be advanced in favor of the preservation of our charitable institutions at the expense of the occasional individual who might be deprived of his right of action in tort. But the situation does not present such a dilemma. Though in most jurisdictions hospitals are held immune from liability so their patients for the negligence of their doctors and nurses, for reasons which will be considered later, in England and the majority of the states they are subject to actions in tort by strangers or their own employees, and their funds subject to depletion by the payment of damages awarded in such actions. This has not resulted in crippling or destroying such charitable institutions in those jurisdictions. Rather the question is whether the individual should suffer the loss or it should be passed on to society and the general public. Or, to put it in another way, is there any good reason requiring under sound public policy that the individual be deprived of his right of recovery from such a corporation because its funds are derived from the charitably minded public and devoted to the relief of suffering and distress? If it be concluded, as we think it must, that the enforcement of the individual's right to recover from a charitable corporation for its tortious acts will not deprive the public of the benefits of such institutions, we fail to see upon what ground it can be said that public policy requires that a charitable corporation should be granted absolute immunity from tort liability. It is a corporation, capable of suing and being sued, and liable upon its contracts as any other person, corporate or individual. That its funds have been dedicated to charity does not place it beyond the law. The will of the donor or donors of the funds of the institution does not exempt them from the operations of the general laws of the land. A charity should not be permitted to indict injury upon some without the right of redress, in order to bestow charity upon others. The result would be to compel the injured person to contribute to the charity against his will. Per...