Howard v. Bishop Byrne Council Home, Inc., 139

Decision Date07 March 1968
Docket NumberNo. 139,139
Citation249 Md. 233,238 A.2d 863
PartiesRussell G. HOWARD v. BISHOP BYRNE COUNCIL HOME, INC.
CourtMaryland Court of Appeals

Martin E. Gerel, Washington, D. C., for appellant.

Gibert R. Giordano, Marlow Heights (Gary R. Alexander, Marlow Heights, on the brief), for appellee.

Before HAMMOND, C. J., and MARBURY, BARNES, FINAN and SINGLEY, JJ.

FINAN, Judge.

Again this Court is asked to overthrow the long established doctrine of immunity of charitable organizations from tort liability, for the reasons that it remains an anachronism, a slave of stare decisis, a source of wrongs committed without a remedy, and against the 'weight' of modern authority. These arguments have all been presented before this Court at some time or another, and, of course, have been found not persuasive. However, since our last review of this subject in 1959, a wealth of recent authority, both in favor of and opposed to charitable immunity, has developed; it appears timely to again discuss the question in light of both the established Maryland policy and the respected authorities from our sister states.

Appellant Russell G. Howard was employed as a laborer by Harris & Brooks, Inc., which had contracted with the appellee to participate in the clearing of a lot owned by the appellee in Oxon Hill. Evidently the appellee expected to construct a building on the lot, but the record remains silent as to the exact nature of the intended building. On April 7, 1966, the appellant was seriously injured when struck by a falling tree which had been cut by an employee or servant of the appellee. Suit was filed, and the appeal is taken from the action of the lower court sustaining the appellee's motion raising preliminary objection to the appellant's declaration. The appellant concedes that the appellee is a charitable, non-profit corporation.

The Maryland law of charitable immunity is familiar to most attorneys, since it has as its root one of the first cases in the United States to decide the issue. Almost all authorities which undertake a detailed analysis of this aspect of tort law, especially those decisions which abrogate the doctrine, have noted that Perry v. House of Refuge, 63 Md. 20 (1885) and MacDonald v. Massachusetts General Hospital, 120 Mass. 432 (1876) were both based on English cases which had been overruled as early as 1866. The Perry case adopted the 'trust fund' theory of immunity on the authority of the Massachusetts case, and Lord Cottenham's statement in Feofees of Heriot's Hospital v. Ross, 12 Clark & Fin. 507, 513, 8 Eng.Reprint 1508, 1510 (1846), that:

'To give damages out of a trust fund would not be to apply it to those objects whom the author of the fund had in view, but would be to divert it to a completely different purpose.'

Both Massachusetts and Maryland appeared nonconversant with the fact that the English case had been overruled by Foreman v. Mayor of Canterbury, (1871) L.R. 6 Q.B. 214, following the rule in Mersey Docks v. Gibbs, (1866) L.R. 1 H.L. 93.

The second case to reach the Court of Appeals was Loeffler v. Trustees of Sheppard & Enoch Pratt Hospital, 130 Md. 265, 100 A. 301, L.R.A.1917D, 967 (1917). After distinguishing the three theories used to justify charitable immunity (trust fund, respondeat superior and implied consent), this Court stated that the trust fund theory was 'firmly established law in Maryland.' Thirty years later the Court decided Howard v. South Baltimore General Hospital, 191 Md. 617, 62 A.2d 574 (1948), the first Maryland case involving a patient at a non-profit hospital. A number of states have distinguished between the functions and financial posture of a non-profit hospital on one hand and a religious or eleemosynary institution on the other. As will be seen shortly in this opinion, this distinction has led to somewhat contradictory results whereby in some states immunity has been granted, and in others immunity denied, because of the fact that the particular defendant was a hospital. In Howard, however, the Court made no such distinction, but instead articulated the first of several statements to the effect that to withdraw immunity would be an act of judicial legislation in the face of both strong public policy and a legislative expression to the contrary.

This reference to the Legislature opened a discussion on the history of what is now Code 1957, Art. 48A, § 480 (1964 Repl.Vol.). This Court noted that in 1947 the General Assembly declined to enact House Bill 99, which would have estopped any charitable institution from pleading immunity as a defense to a tort claim. Instead, it adopted the Senate version (s.B. 411), which estops a liability insurer from setting up the charitable immunity of the insured. That became Art. 48A, § 85 of the Code, repealed and reenacted as Art. 48A, § 480 by Chapter 553, Laws of Maryland 1963. The Court in Howard and later cases made it plain that the Legislature had broached the entire problem, and had resolved it in its own manner. '* * * the Legislature may well have had in mind the fact that, except to the extent of the premiums voluntarily paid, there would be no invasion of the trust funds, upon which the rule of immunity was largely predicated.' State for use of Cavanaugh v. Arundel Park Corp., 218 Md. 484, 488, 147 A.2d 427, 428, (1959). See also Gorman v. St. Paul Fire & Marine Ins. Co., 210 Md. 1, 121 A.2d 812 (1956); Thomas v. Prince George's County Commissioners, 200 Md. 554, 92 A.2d 452 (1952). Most recently, in Cornelius v. Sinai Hospital of Baltimore, Inc., 219 Md. 116, 148 A.2d 567 (1959), the Court, per curiam, restated its firm adherence to the settled Maryland rule granting immunity, but left the door open for the Legislature to step in should it sense the demand or desire. To date, the rule of Perry v. House of Refuge, supra, stands, tempered only by statutory provisions directed to the insurer (Art. 48A, § 480) and Art. 43, § 556A (1965) Repl.Vol.), which will be discussed shortly in this opinion.

With the Maryland law thus established, we now focus on what the appellant calls the 'overwhelming body of judicial reasoning' abolishing the rule. Certainly, the reports are replete with decisions on point. However, a comprehensive review in this opinion would only serve as a repetition of the compilations found in several authorities. See, e. g., Justice Rutledge's landmark opinion in President and Directors of Georgetown College v. Hughes, 76 U.S.App.D.C. 123, 130 F.2d 810 (1942); Rabon v. Rowan Memorial Hospital, Inc., 269 N.C. 1, 152 S.E.2d 485, 496-498 (1967); Flagiello v. Pennsylvania Hospital, 417 Pa. 486, 208 A.2d 193 (1965); Prosser, Torts § 127 (3d Ed.1964); Annot. 25 A.L.R.2d 29 (1952). After studying these authorities, as well as the more recent rulings in other states, we cannot conclude that Maryland is still attempting to breathe life into a dead law. What is indicated, however, is that of the forty seven states to decide the question, 1 less than one-half (twenty) have completely abandoned charitable tort immunity.

Eight states agree with Maryland that, as a matter of public policy, eleemosynary institutions should be immune from liability to tort claimants, either on the theory that the charitable assets are placed in trust for charitable purposes, 2 or that the doctrine of respondeat superior does not apply to religious or charitable organizations. 3 Two of these states, Missouri 4 and South Carolina, 5 have even gone so far as to rule that a charitable corporation may set up its immunity even though it carries liability insurance.

At the other end of the spectrum are the twenty states and the District of Columbia which have in effect totally abandoned charitable immunity, and now hold all such institutions amenable to suit, and their property subject to attachment. 6

Most jurisdictions, however, are reluctant to totally withdraw immunity, and, therefore, they set up important distinctions. As a consequence, we discover that in most states, liability will depend on the type of negligence, the function of the charitable institution at the time of the injury, the presence of liability insurance or any combination of these factors. For instance, in Nebraska, charitable hospitals are not immune to suit by a patient for negligence, but liability is limited to the effective insurance coverage. Myers v. Drozda, 180 Neb. 183, 141 N.W.2d 852 (1966). To this extent, the rule is similar to Maryland. See Code 1957, Art. 43, § 556A (1965 Repl.Vol.). Both Arkansas 7 and Maine, 8 which were previously cited as retaining total immunity, also provide by statutes similar to Maryland that a charitable institution may be liable to the extent of its effective insurance coverage. Georgia has held that a liability policy represents a non-charitable asset which may support a cause of action. 9 And in a recent case, the Supreme Court of Indiana withdrew immunity from hospitals but expressly declined to decide whether the doctrine of charitable immunity existed in that state. It did, however, recommend that the state legislature take action to authorize the purchase of liability insurance by charities, limiting liability to the amount of the coverage. 10

We note that Indiana and Nebraska are just two of several states, perhaps the majority of states, that treat hospitals as a separate class of charitable institutions. As noted above Maryland also draws the distinction by statute. The reason for separate treatment was well summarized by the Supreme Court of Appeals of West Virginia in Adkins v. St. Francis Hospital of Charleston, West Virginia, 149 W.Va. 705, 143 S.E.2d 154, 158 (1965):

'In the early days of our society hospitals bore the true character of charitable institutions. They were a haven for the indigent ill, lame and disabled. The expense of their operation and maintenance was, for the most part, borne by contributions from charitably inclined citizens. The indigent rarely paid for services...

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