Gregory v. Salem General Hospital

• Decision Date: 05 December 1944
• Citation: 175 Or. 464,153 P.2d 837
• Parties: GREGORY <I>v.</I> SALEM GENERAL HOSPITAL
• Court: Oregon Supreme Court

175 Or. 464

153 P.2d 837

GREGORY

v. SALEM GENERAL HOSPITAL

Supreme Court of Oregon.

Argued October 17, 1944.

Affirmed December 5, 1944.

Rehearing denied December 29, 1944.

Charities

1. A hospital, built by public subscriptions, operated not for profit, receiving all who come for treatment, and accepting moderate compensation only from those able to pay, was a "charitable institution" within the rule that charitable institutions are exempt from liability for torts arising out of negligence.

Religious societies

2. The statute of 1872 is applicable only to the formation of ecclesiastical corporations.

Charities

3. The provision that no part of resources of corporation should be used for any other purpose than that specified in the statute relating to ecclesiastical corporations was not intended to grant ecclesiastical corporations immunity from tort liability, but to restrict them to the field of religion, charity, and public worship, and exemption from tort liability is not dependent upon the presence of such provisions in the statute under which the corporation is formed, but upon the fact that it is engaged in works of charity, benevolence, religion, or education.

Charities

4. An eleemosynary institution is exempt from liability for acts of negligence, whether the tort was committed upon a stranger to the charity, and irrespective of whether due prudence was exercised in the selection of the tortious servant, or whether he was inadvisedly chosen.

Courts

5. Where the rule granting eleemosynary, religious, and educational institutions exemption from liability for their acts of negligence had been the law for a third of a century and since its first pronouncement had been thrice reaffirmed, the doctrine of stare decisis required that the rule be followed.

                  See 109 A.L.R. 1204; 10 Am. Jur. 700
                  14 C.J.S., Charities, § 75
                

Before BAILEY, Chief Justice, and ROSSMAN, LUSK, BRAND and HAY, Associate Justices.

Appeal from Circuit Court, Marion County.

WALTER L. TOOZE, Judge.

Action by P.M. Gregory against Salem General Hospital for injuries resulting from alleged negligence of nurse. From a judgment for defendant on a directed verdict, the plaintiff appeals.

AFFIRMED. REHEARING DENIED.

H.G. Hoy, of Portland (Hoy & Prag, of Portland, on the brief), for appellant.

F.S. Senn, of Portland, and Custer Ross, of Salem (Senn & Recken, of Portland, on the brief), for respondent.

ROSSMAN, J.

This is an appeal by the plaintiff from a judgment of the circuit court based upon a directed verdict. The action out of which the challenged judgment arose was predicated upon averments that the plaintiff, while a paying patient in the defendant's hospital, was injured through the negligence of a nurse in the defendant's employ who, the plaintiff alleges, the defendant knew was incompetent. The complaint charges (1) that the nurse just mentioned placed a hot water bottle in the bed occupied by the plaintiff after arranging the bed covers in such a way that the plaintiff could neither eject the bottle nor avoid contact with it; and (2) that the defendant failed to provide for him a call signal whereby he could summon aid.

All the averments just mentioned are denied by the defendant. The defendant (respondent) admits, however, that the plaintiff was a patient in the defendant's hospital. The answer alleges:

"The defendant is a charitable, eleemosynary institution and is operated as a non-profit corporation that this defendant has no stockholders, pays no dividends and all of its assets are devoted to charitable purposes such as care for the sick and injured; that the defendant operates a hospital in Salem, Oregon, and that said hospital admits patients regardless of race, color or creed; that it administers to the poor as well as to the rich and that when patients are unable to pay this defendant renders treatment without charge; that the defendant receives donations as a charitable institution and is a non-profit institution."

The facts just quoted are denied in the reply.

At the trial, through stipulation, the issue as to the charitable character of the defendant was first tried. Only the defendant presented evidence upon that issue. Its articles of incorporation state:

"Article II. The enterprise, business, pursuit and occupation, in which this corporation proposes to engage is the care of the sick, the relief of the needy and suffering, and particularly to establish, and maintain, a public and private hospital, to be conducted independent of sectarianism, and to be open to persons of whatever sect, or creed, and also for the purpose of benevolence and charity.

"Article III. The estimated value of property, and money, possessed by this corporation, at the time of signing these articles, is about one thousand dollars; and its sources of revenue, or income, are from gifts, bequests, contributions, donations, endowments, and receipts for services rendered.

"Article IV. The title of the officers making those articles of incorporation shall be `The Board of Control of the Salem Hospital.'"

The articles just mentioned were filed July 7, 1896. November 20, 1917, the defendant filed supplementary articles of incorporation which, in addition to expanding the membership of its board into fifteen directors provided that "no practicing physician shall be eligible to membership on the Board of Directors." The supplementary articles delineated the manner in which the fifteen directors should be chosen; for instance: "Seven members shall be named by a committee consisting of the Mayor of the City of Salem, the County Judge of Marion County, Oregon, and the President of the Commercial Club of Salem, * * *."

According to the evidence, there was no hospital in Oregon south of Portland in 1896 and a need for one existed. After the articles of incorporation were filed, friends of the proposed hospital solicited funds for its construction. Persons of all classes and vocations contributed. In 1899 the defendant received gratuitously from the Oregon Children Aid Society a deed to a parcel of real property upon which the hospital now stands. The deed contained a condition requiring the defendant always to maintain in the hospital a children's ward "under the care of a faithful and competent nurse both day and night" and to permit the Aid Society to send to the ward any indigent child for free care and treatment, provided that not more than three thus selected should be in the hospital at one time. It further provided that the Aid Society should always be represented on the defendant's board of control. The evidence indicates that the defendant has complied with the conditions of the deed.

The defendant's hospital contains seventy-eight beds and meets the standards of the American College of Surgeons. It has their approval.

According to the evidence, none of the members of the defendant's board nor any of its officers receive remuneration for their services. The defendant has a business manager and a superintendent. The latter supervises the care of the patients and the nurses who work in the hospital. Both the business manager and the superintendent receive salaries, but they are modest in amount. All sums received by the defendant, whether from patients or from charity, are employed to discharge the expenses incurred in the maintenance of the hospital, the purchase of equipment and the care of patients who cannot pay. Through a bequest the hospital has an endowment of $1,500.

The evidence indicates that the defendant's charges are lower than those of any other standardized hospital in the Northwest. Its hospital admits all who come for treatment, regardless of race, creed, color or inability to pay. All patients receive similar treatment and no discrimination is exercised on account of any of the circumstances just mentioned.

When a patient seeks admission to the defendant's hospital he is accepted without any inquiry being made as to his ability to pay for the services which he will receive. Upon his reception as a patient a work sheet is prepared for him upon which entries will be made covering his case. Among other information that is entered upon the sheet are the charges for services rendered to him. If the defendant's business manager believes that the patient ought not to be expected to pay for the services rendered, the word "charity" is written upon the sheet. In that event, no statement of account is rendered to the patient, but the entries of charges are continued so that the defendant may know at the end of the year the total of the charity it administered. In the following years the defendant administered the following charity:

                            1936         $ 4,839.14
                            1937           4,479.97
                            1938           4,564.13
                            1939           6,684.54
                            1940           6,881.49
                            1941           7,168.68
                            1942           5,614.60
                

Those totals are for charity only and include nothing for unpaid bills, bad credit, and so forth.

According to a summary prepared by the defendant's business manager of the entries in its account books, the defendant has received, since August 7, 1899, a total of $209,526.45 through the medium of gifts. In order to illustrate the nature of these gifts, we selected at random the following from the summary:

                    "Committee for entertainment — Pres. Theodore Roosevelt
                      7/8/1902. Donated balance of its fund for childs
                      wheel chair _______________________________________________ $  12.45
                    * * *
                    "Mrs. G.C. Bellinger, 6/19/22, Sale of hospital bricks for
                      new building _______________________________________________  161.61
                    * * *
                    "Loretta Ford, July 17, 1935, Surgery sterilizer _____________  500.00
                    * * *
                    "Ladies Auxiliary, 7/6/38, Sewing machine ____________________ 190.00"
                

1. The foregoing evidence is wholly uncontradicted. It is true that charity is not administered in the defendant's hospital with...