Idaho Falls Consol. Hospitals, Inc. v. Bingham County Bd. of County Com'rs

• Decision Date: 12 March 1982
• Docket Number: Nos. 13772,13882,s. 13772
• Citation: Idaho Falls Consol. Hospitals, Inc. v. Bingham County Bd. of County Com'rs, 642 P.2d 553, 102 Idaho 838 (Idaho 1982)
• Parties: IDAHO FALLS CONSOLIDATED HOSPITALS, INC., an Idaho corporation, Plaintiff-Respondent, v. BINGHAM COUNTY BOARD OF COUNTY COMMISSIONERS, Defendant-Appellant.
• Court: Idaho Supreme Court

Page 553

642 P.2d 553

102 Idaho 838

IDAHO FALLS CONSOLIDATED HOSPITALS, INC., an Idaho corporation, Plaintiff-Respondent, v.BINGHAM COUNTY BOARD OF COUNTY COMMISSIONERS, Defendant-Appellant.

Nos. 13772, 13882.

Supreme Court of Idaho.

March 12, 1982.

Colin W. Luke, Deputy, Bingham County Pros.Atty., Blackfoot, for defendant-appellant.

C. Timothy Hopkins, of Hopkins, French, Crockett & Springer, Idaho Falls, for plaintiff-respondent.

DONALDSON, Justice.

On May 9, 1979, Juan Jose Ortiz and Leobardo Ortis Ramos were involved in an automobile accident.The respondent, Idaho Falls Consolidated Hospitals, Inc., provided medical services costing $4,175.16.At the time of the accident both parties maintained a residence in Bingham County but were indigent and unable to pay for the medical expenses.

The hospital filed applications on behalf of the patients with the appellant, Bingham County Board of County Commissioners, seeking payment for medical services under the Idaho Medical Indigency Act.¹ The Board denied the hospital's application on the basis that the two indigents were illegal aliens.

This decision was appealed by the hospital to the district court on the grounds that the denial of the application was in violation of the Equal Protection Clause of the Fourteenth Amendment.It was also asserted that the federal government had preempted the area of law covering all aliens.

Without reaching the constitutional or the preemption issues, the district court ruled in favor of the hospital.Bingham County was ordered to grant the application filed by the hospital for county medical aid.

Subsequent to that decision Bingham County moved the district court to reconsider its decision for the reason that the Idaho Medical Indigency Act was in violation of Article 8, § 4 and Article 12, § 4 of the Idaho State Constitution.²The court granted the motion because of the importance of the constitutional issue.

The two parties submitted briefs and the district court again ruled in favor of the hospital.The court found that the provisions of the Act were not barred by the Idaho State Constitution.This appeal followed.

The trial court found that the Act was constitutional because it served a public purpose.It appears from this finding that the trial court applied the criteria used to determine the constitutionality of an act which imposes financial liability upon the state rather than a county or municipality.Concerning an act which imposes financial liability upon the state, this Court has held that under article 8, § 2, "no entity created by the state can engage in activities that do not have primarily a public rather than a private purpose, nor can it finance or aid any such activities."Board of County Commissioners v. Idaho Health Facilities Authority, 96 Idaho 498, 502, 531 P.2d 588, 592(1975).However, article 8, § 4, specifically forbids counties from loaning or giving credit "for any purpose whatever."Therefore, the fact the Act in this case serves a public purpose is not enough in itself to uphold its constitutionality.Fluharty v. Board of County Commissioners, 29 Idaho 203, 158 P. 320(1916).However, even though the trial court misapplied the law, where an order of the lower court is correct but based upon an inapplicable rule of law, the order will be affirmed upon the correct rule of law.Foremost Insurance Co. v. Putzier, 102 Idaho 138, 627 P.2d 317(1981).

Bingham County maintains that this Court in Fluharty, supra, interpreted the Idaho State Constitution to prohibit a county from appropriating money to a private entity that results in giving or loaning credit directly or indirectly to a political body.Following this caseBingham County argues that the statutory scheme in question violates the Idaho State Constitution because the hospital is a private entity and the Idaho Medical Indigency Act requires Bingham County to loan its credit to the hospital corporation and also requires the county to become responsible for the debts of indigent persons.

Bingham County also argues that following an 1877 Pennsylvania case cited in dictum in Fluharty, supra, the statute has to be found unconstitutional.The Pennsylvania case involved a similar statute and constitutional provision and the Pennsylvania Supreme Court found the statute unconstitutional.However, we cited this 1877 case in dictum and as this Court has previously stated, "To get the rule applicable to the construction of our Constitution it is not necessary to go into other jurisdictions ...."Higer v. Hansen, 67 Idaho 45, 63, 170 P.2d 411, 422(1946).

In Engelking v. Investment Board, 93 Idaho 217, 458 P.2d 213(1969)this Court also stated that "(t)he fundamental object to be sought in construing a constitutional provision is to ascertain the intent of the framers(,) and the provision must be construed or interpreted in such manner as to fulfill the intent of the people, never to defeat it."Id. at 221, 458 P.2d 213.Therefore, we decline to follow this Pennsylvania case, and instead, will examine the intent of the delegates to the Constitutional Convention in order to determine if they meant to prohibit counties from reimbursing hospitals for the care of indigents.One way to determine their intent is to review the history of the west at the time the Constitution was written.This Court in Idaho Water Resource Board v. Kramer, 97 Idaho 535, 560, 548 P.2d 35, 60(1976) cited a law review article that reviewed the events occurring at the time this constitutional provision was adopted.It stated:

" 'In the nineteenth century, the United States was enjoying a rapid westward expansion.A key element in this expansion was the construction of railroads and other communication and transportation systems, the routes of which vastly influenced growth.An adjacent railroad was often crucial to the economic growth, if not the very existence, of many localities.As a result, state and local governments, in order to encourage specific routes and spurs, offered financial assistance to struggling railroads.This assistance was not entirely without precedent in light of earlier successes with similar projects such as the Erie Canal.Governmental assistance usually took the form of stock or security purchases, or co-signatures on bonds issued by railroads.Since these private ventures were at best highly speculative, many failed, leaving governmental units, and thus the taxpayer, either holding worthless stock certificates or, even worse, liable for large inadequately secured debts.During the depression of 1837 nine states defaulted on, or repudiated, debts of this type.These repudiations were made easier because a significant portion of the debt certificates were held by European investors who desired a stake in the American adventure.

" 'The resulting economic crisis led to the passage of constitutional provisions designed to limit state indebtedness and restrict governmental involvement in private ventures.Forty-five state constitutions contain provisions prohibiting the lending of credit; ...' "Comment, State Constitutional Provisions Prohibiting the Loaning of Credit to Private Enterprise-A Suggested Analysis, 41 U.Colo.L.Rev. 135, 136(1969).

Another method used to determine the intent of the delegates is to consider the proceedings at the constitutional convention.Considering these proceedings allows this Court"to interpret the applicable provisions of the Constitution as nearly as possible in a manner consonant with the objects and purposes contemplated by the framers of the Constitution at the time of its adoption."Idaho Telephone Co. v. Baird, 91 Idaho 425, 429, 423 P.2d 337, 341(1967);Oneida County Fair Board v. Smylie, 86 Idaho 341, 386 P.2d 374(1963).The proceedings of the Constitutional Convention set out in Proceedings and Debates of the Constitutional Convention of Idaho 1889, at 597(I.W.Hart ed. 1912), show that the delegates were concerned about the people of the state becoming burdened with taxes because railroads had induced the people to vote subsidies to aid in the construction of railroads.One of the delegates, Mr. Sweet from Latah County, stated:

"I would say, Mr. Chairman, in Nebraska and Iowa, in fact in nearly all of the western states, railway corporations and others of that character induced the people of counties and towns to vote subsidies in the way of bonds to aid them in the construction of railroads, until the people of those states became so burdened with taxes that they turned upon all sorts and kinds of indebtedness, and the result has been there has been a great deal of antagonism-

....

"Well, all those states have turned against corporations and the voting of subsidies, and I think they are justly, and I think the example of those states should be a lesson to us to avoid giving permission to municipalities to vote such subsidies; ..."Proceedings and Debates of the Constitutional Convention of Idaho 1889, at 597(I.W.Hart ed. 1912).

While discussing article 8, § 4 and article 12, § 4, in Boise Redevelopment Agency v. Yick Kong Corp., 94 Idaho 876, 499 P.2d 575(1972), this Court also recognized the reason behind the adoption of these constitutional clauses.

"The proceedings and debates of the Idaho Constitutional Convention indicate a consistent theme running through the consideration of the constitutional sections in question.It was feared that private interests would gain advantages at the expense of the taxpayers.This fear appeared to relate particularly to railroads and a few other large businesses who had succeeded in gaining the ability to impose taxes, at least indirectly, upon municipal residents in western states at the time of the drafting of our constitution."Id. at 883-84, 49 P.2d 575.

Finally, to help determine the intent of the delegates, constitutional provisions must be read in light of the law existing at the time of the adoption of the provision.Higer v. Hansen...