Eaton v. BOARD OF MANAGERS OF JAMES WALKER MEM. HOSP.
| Decision Date | 24 June 1958 |
| Docket Number | Civ. No. 700. |
| Court | U.S. District Court — Eastern District of North Carolina |
| Parties | Hubert A. EATON, Daniel C. Roane and Samuel James Gray, Plaintiffs, v. BOARD OF MANAGERS OF the JAMES WALKER MEMORIAL HOSPITAL, a body corporate; Alan A. Marshall, Chairman; H. E. Hamilton, Secretary of the Board of Managers of the James Walker Memorial Hospital; The City of Wilmington, North Carolina, Dan D. Cameron, Mayor; and the County of New Hanover, North Carolina, Ralph T. Horton, Chairman of County Commissioners, Defendants. |
Robert R. Bond, Wilmington, N. C., C. O. Pearson, Durham, N. C., for plaintiffs.
Cicero P. Yow, Hogue & Hogue, John Bright Hill, Wilmington, N. C., for defendants.
The instant suit is brought by three Negro doctors for themselves and for other Negro doctors, as a class, for the purpose of obtaining admission to practice medicine at James Walker Memorial Hospital on what is known as the "Courtesy Staff". The City of Wilmington and the County of New Hanover are made parties defendant in addition to the Hospital's Board of Managers and H. E. Hamilton who is Secretary of the Board. The defendants move to dismiss under Rule 12, Fed.Rules Civ.Proc. 28 U.S.C.A. for lack of federal jurisdiction. The facts of the case, as determined by pleadings and affidavits, appear to be as follows:
By virtue of Chapter 23 of the Public Laws of the North Carolina General Assembly of 1881, the City of Wilmington and the County of New Hanover were authorized to establish and maintain a hospital. Pursuant to this authorization land was acquired and the City Hospital of Wilmington became existent, subsequent expenses relating thereto being borne 40 percent by the City and 60 percent by the County.
In 1900 Mr. James Walker offered to build a modern hospital on the property then owned by the City and County and occupied by the City Hospital of Wilmington. The building used by the latter institution was removed, and construction of the new hospital was begun. The new building was finished after Mr. Walker's death and under the direction of his will.
As a result of Mr. Walker's offer, the defendant, Board of Managers of James Walker Memorial Hospital of the City of Wilmington, North Carolina, was chartered by the North Carolina legislature under Chapter 12 of the Private Laws of 1901. The purpose of this private law, as stated in its preamble, was to provide for the management of a hospital in New Hanover County and Wilmington, N. C., which hospital had been built with funds provided by one James Walker to provide for the maintenance and medical care of sick and infirm poor persons who might from time to time become chargeable to the charity of the City and County, and to provide for other persons who might be admitted. The charter further provided that it was desirable, and that the purpose of the act was to remove the management of the hospital as far as possible from the vicissitudes which generally result when such an institution is left in control of local municipal authorities. The act further declared that it was the purpose to provide for the permanent maintenance of the hospital by said City and County. To this end the hospital was chartered as a body corporate with all the rights and privileges conferred upon corporations under law. The original Board of Managers of the hospital was appointed pursuant to this act. Three were elected by the Board of Commissioners of New Hanover County; two were elected by the Board of Aldermen of the City of Wilmington and four members were selected by Mr. James Walker. This board is self-perpetuating and has continued as such since its inception.
Upon the completion of the new James Walker Memorial Hospital building on July 19, 1901, the City of Wilmington and the County of New Hanover conveyed to the Board of Managers of James Walker Memorial Hospital of the City of Wilmington, N. C. a tract of land consisting of all of Block 227 of the City of Wilmington to hold "so long as the same shall be used and maintained as a hospital for the benefit of the County and City aforesaid, and in case of disuse or abandonment to revert to the said City and County as their interests respectively appear * * *." The deed specifically refers to the fact that the General Assembly has created and established a hospital under the supervision of a Board of Managers and the conveyance states that it is for the purpose of removing the management of the hospital as far as possible from the vicissitudes which generally result when such an institution is left under the control of municipal authorities. The effect of this deed was to convey to the original Board of Managers of James Walker Memorial Hospital of the City of Wilmington, N. C., a separate corporation, all of Block 227 of the City of Wilmington, N. C., which had on it a building which had been built with funds provided by the late James Walker. After the acquisition of this property additional buildings were built thereon and also an additional city block was acquired in fee simple by the Board of Managers upon which the south wing of the hospital is now located. The acquisition of the additional property was in fee simple without the restrictions set forth in the deed from the City and County.
After this conveyance was made the corporation created by the Private Law of 1901 took over the operation of the hospital. At the time of the institution of this suit none of the original members of the Board of Managers were still on the Board and no member of the City or County government is now a member of the Board or in any way in charge of the affairs of James Walker Memorial Hospital. The corporate charter gives the Board of Managers the absolute power to manage the hospital and to pass all rules and regulations necessary therefor, and since its inception the hospital has been operated, without interference or control by the City of Wilmington or New Hanover County, by its own self-perpetuating Board of Managers which have a separate corporate existence.
As was stated above, the Act of 1901 which chartered the hospital provided for funds in the annual amount of $8,000 from the City (40 percent) and County (60 percent) to maintain it. Subsequently additional acts were passed by the legislature to provide for maintenance as follows:
The Private Act of 1907, Chapter 38 of the North Carolina General Assembly, provided that annual appropriations could be made from public funds of the City of Wilmington and the County of New Hanover in order that the hospital be run in an efficient manner. The Public-Local Act of 1915, Chapter 66, provided that the appropriation for the support of the James Walker Memorial Hospital should be contributed and paid in equal proportions, one-half by the City and one-half by the County, and should not be less than an annual amount of $15,000 by said City and County. The Public-Local Act of 1937, Chapter 8, provided that a minimum annual appropriation of $50,000 would be necessary to give proper medical and hospital attention to the indigent sick and afflicted poor of the City and County, and said Act authorized and directed the City and County to make such minimum appropriation to enable the hospital to properly care for the indigent sick and afflicted poor and to renew its facilities and make additions to its physical plant. The Public-Local Law of 1939, Chapter 470, authorized the City and County to enter into contracts with the James Walker Memorial Hospital and to appropriate annually a sum not to exceed the amount of $25,000 each and authorized, if necessary, an additional tax levy. The Session Laws of 1951, Chapter 906, provided for contributions of the City and County to the James Walker Memorial Hospital to be on a per diem basis for the indigent sick and afflicted poor of said City and County.
Pursuant to all of the above statutes, the City of Wilmington, North Carolina, and the County of New Hanover made payments to the hospital up to the year 1951. In this latter year the provisions of the Act of 1901 relating to financing the hospital and all subsequent acts were declared unconstitutional by the Supreme Court of North Carolina in Board of Managers v. Wilmington, 237 N.C. 179, 74 S.E.2d 749. Since 1951 funds have been paid to the hospital by the City and County under contract pursuant to Article 14A of Chapter 153, General Statutes of North Carolina, enacted in 1953. The amounts so paid are as follows:
Receipts Receipts Total All
City of County of Other Cash
Year Wilmington New Hanover Total Receipts Receipts
1952 $ 1,666.71 $22,482.89 $24,149.60 $ 897,912.18 $ 922,061.78
1953 None 21,672.75 21,672.75 952,847.27 974,520.02
1954 26,118.31 34,749.01 60,867.32 1,021,036.01 1,081,903.33
1955 12,945.67 33,339.73 46,285.40 1,034,859.40 1,081,144.80
1956 23,675.33 41,129.03 64,804.36 1,163,598.98 1,228,403.34
1957 1,738.00 58,533.05 60,271.05 1,352,238.51 1,412,509.56
At the present time the City does not have a contract with the hospital and in no way is a source of revenue for the same. The County, however, continues to pay according to contract for the care of indigent patients. The history of this contract and its terms are as follows:
On May 6, 1957, the County of New Hanover requested to be quoted the rates under which James Walker Memorial Hospital would undertake the care of certified indigent patients. On May 15, 1957, the hospital furnished the County of New Hanover with the following proposal:
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