Eaton v. Board of Managers of James Walker Mem. Hosp., 7731.
| Decision Date | 29 November 1958 |
| Docket Number | No. 7731.,7731. |
| Citation | 261 F.2d 521 |
| Parties | Hubert A. EATON, Daniel C. Roane, and Samuel James Gray, Appellants, 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. Harton, Chairman of County Commissioners, Appellees. |
| Court | U.S. Court of Appeals — Fourth Circuit |
Robert R. Bond, Wilmington, N. C., and Conrad O. Pearson, Durham, N. C., for appellants.
Cyrus D. Hogue, Jr., Wilmington, N. C., for appellee Board of Managers of James Walker Memorial Hospital.
George Rountree, Jr., Wilmington, N. C. (John Bright Hill and Cicero P. Yow, Wilmington, N. C., on brief), for appellees City of Wilmington, N. C., et al.
Before SOBELOFF, Chief Judge, and SOPER and HAYNSWORTH, Circuit Judges.
The question in this case is whether certain Negro physicians practicing in Wilmington, North Carolina, are entitled to a declaratory judgment that they may not be excluded from courtesy staff privileges at the James Walker Memorial Hospital in that city solely on account of their race or color. The suit was brought by three physicians against the Board of Managers of the hospital, the City of Wilmington, and the County of New Hanover. Federal jurisdiction is based on the theory that the Board of Managers of the hospital, a corporation created by an act of the General Assembly of North Carolina, is an instrumentality of the City of Wilmington and the County of New Hanover and as such is an agency of the State of North Carolina, which is prohibited by the first section of the Fourteenth Amendment to the Federal Constitution from denying to any person within its jurisdiction the equal protection of the laws. Jurisdiction is also based on the civil rights statutes, 42 U.S.C.A. §§ 1981, 1983, which furnish redress for persons who are deprived of their constitutional rights under color of any State statute or usage.
The defendants filed a motion to dismiss the complaint on the ground that the hospital is a private corporation not subject to State control, and hence the discriminatory treatment complained of can not be regarded as State action cognizable in a Federal court. The District Judge being of the opinion (164 F.Supp. 191) that this position was sustained by the undisputed facts set forth in the pleadings, stipulation and affidavits of the parties, dismissed the complaint.
The City of Wilmington and the County of New Hanover were authorized by Chapter 23 of the Public Laws of North Carolina of 1881, to establish and maintain a hospital and accordingly acquired land, erected a building thereon and established a hospital under the control of the Board of Managers of the City Hospital of Wilmington. In 1900, James Walker, a charitable citizen of Wilmington, furnished funds to build a modern hospital on the site of the City Hospital, and the old building was razed and construction of the new building was begun. It was completed on July 19, 1901, after Mr. Walker's death. He specified in his will that his executors should provide such moneys as were necessary for the completion of the building and should deliver and turn it over to the proper authorities of the City and of the County to be held and used by them as a hospital for the sick and afflicted.
As a result of this benefaction the Board of Managers of the James Walker Memorial Hospital was chartered by Chapter 12 of the Private Laws of North Carolina of 1901. This statute noted the liberality of the donor in providing a modern hospital for the maintenance of the sick and infirm poor who might become a charge upon the City and County, as well as for other persons, and declared that it was desirable that the management of the hospital be removed as far as possible from the control of local municipal authorities, subject to changing political conditions, and to that end chartered the hospital as a body corporate, provided for the selection of the individuals to constitute the original Board of Managers and made them a self-perpetuating body empowered to succeed to the powers and duties of the Board of Managers of the City Hospital after the new hospital had been turned over to and accepted by the City and County. Upon the completion of the building in 1901, the City and County conveyed the tract of land upon which it stood to the new Board of Managers of the hospital to hold in trust for the use of the hospital so long as it should be maintained as such for the benefit of the City and County, with reverter to the City and County in case of its disuse or abandonment. Subsequently additional land was acquired and additional buildings were erected by the Board of Managers.
The hospital has been operated under the authority of this Board of Managers since its charter was granted in 1901. In that charter it was stipulated that New Hanover County should provide the sum of $4,800 annually and the City of Wilmington $3,200 annually, to be placed in the hands of the Board of Managers of the hospital for the maintenance and medical care of the sick and infirm poor admitted thereto. Subsequent acts of the General Assembly, passed in 1907, 1915, 1937, 1939, and 1951, authorized various appropriations to be made for these purposes by the City and County. All of these provisions, however, were declared to be unconstitutional by the Supreme Court of North Carolina in Board of Managers of the James Walker Memorial Hospital of Wilmington v. City of Wilmington, 1953, 237 N.C. 179, 74 S.E.2d 749. in which the hospital sought a declaratory judgment adjudging the rights of the hospital to support from the City and County for the care of their sick and indigent. The court held that the appropriations for the hospital contained in the acts of 1901, 1907 and 1915 were invalid since the support of the hospital was not a necessary governmental expense and had not been approved by a majority of the qualified voters of the area, which is a prerequisite to the validity of an appropriation for an unnecessary governmental expense under Article VII, Section 7, of the State Constitution. The provisions for the payment of moneys to the hospital under the acts of 1937, 1939 and 1951 were also held invalid on the ground that they contravened the provisions of Article II, Section 29, of the State Constitution, adopted by the vote of the people of the State in 1916, which prohibited the passage of any local act relating to health.
The Supreme Court of North Carolina, however, pointed out in the cited case that the General Assembly of the State has power to authorize the governing body of any city or county to contract with the hospital for the medical care and hospitalization of the sick and poor of the area. Such a statute had previously been enacted for certain other towns and counties, and a similar act, applicable to the City and County in this case, was passed by the General Assembly of North Carolina, in Chapter 878 of the acts of 1953, G.S. § 153-176.1, under which funds have been paid to the James Walker Memorial Hospital by the City and County under contract. The amounts thus paid and the total cash revenues of the hospital from 1952 to 1957 were as follows:
Receipts
City of Wilmington Total All
Year & County of New Hanover Cash Receipts
1952 ................ $24,149.60 ................. $ 922,061.78
1953 ................ 21,672.75 ................. 974,520.02
1954 ................ 60,867.32 ................. 1,081,903.33
1955 ................ 46,285.40 ................. 1,081,144.80
1956 ................ 64,804.36 ................. 1,228,403.34
1957 ................ 60,271.05 ................. 1,412,509.56
At the time of the trial of the suit the City did not have a contract with the hospital and provided no revenue to it, but the County operated under a contract dated May 6, 1957, for the care of certified indigent patients whereby it paid a specified per diem, which amounted to $16 per day per patient. The per diem cost was between $18 and $19.
On March 19, 1955, the plaintiffs applied for staff privileges at the hospital, which consisted of allowing the use of private rooms and pay wards for the patients of physicians. The applications were denied, and for the purpose of this action it is conceded that the applications were properly made but were denied by the Board of Managers solely on account of the race of the applicants. The plaintiffs argue that this action of the Board amounts to action by the State which the Federal court has power to interdict. They rest their contention mainly upon the following circumstances:
1. The establishment of the original hospital on the present site and the appropriation of certain moneys for its maintenance by the City and County under authority of Chapter 23 of the act of the General Assembly of North Carolina, 1881.
2. The operation of the hospital by the City and County thereafter until 1901.
3. The declarations in Chapter 12 of the act of 1901, incorporating the James Walker Memorial Hospital, that the City and County had been provided with a modern hospital for the care of the sick and infirm poor of the locality and that the City and County should appropriate certain moneys annually for the maintenance of the hospital, and also that the Board of Managers named in the act should succeed to all the powers and duties of the Board of Managers of...
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