Legat v. Adorno

• Decision Date: 24 July 1951
• Citation: 83 A.2d 185,138 Conn. 134
• Court: Connecticut Supreme Court
• Parties: LEGAT v. ADORNO, Treasurer. Supreme Court of Errors of Connecticut

Page 185

83 A.2d 185

138 Conn. 134

LEGAT v. ADORNO, Treasurer.

Supreme Court of Errors of Connecticut.

July 24, 1951.

Leo v. Gaffney, New Britain, for the plaintiff.

William L. Beers, Deputy Atty. Gen. (George C. Conway, Atty. Gen., on the brief), for the defendant.

John Q. Tilson, Jr., New Haven, Angus N. Gordon Jr., New Haven, as amicus curiae.

Ernest McCormick, Hartford (Lee C. Fielden, Hartford, on the brief), as amicus curiae.

George J. Coyle, New Britain, as amicus curiae.

Before BROWN, C. J., and JENNINGS, BALDWIN, INGLIS and O'SULLIVAN, JJ.

BROWN, Chief Justice.

The principal question for determination in this taxpayer's suit for a declaratory judgment and an injunction is whether § 3 of the Institutional Building Bonds Act, authorizing capital expenditures of state funds for institutions only partially maintained by the state or under the supervision of an agency thereof, violates § 1 of article first of the state constitution, which prohibits the grant to anyone of 'exclusive public emoluments or privileges'. The questions reserved for the advice of this court upon the facts stipulated are stated in the footnote. ¹

The Generl Assembly at the special session of June, 1949, authorized and provided, by Special Act No. 9, known as the Institutional Building Bonds Act, for a $17,000,000 bond issue. 25 Spec.Laws 1408. Section 3 of the act, hereinafter referred to as the bond act, specified that the proceeds of the sale of the bonds were to be paid into an 'Institutional Building Fund'. Of this fund, $15,000,000 was designated to 'be used to purchase land, construct or acquire buildings, purchase equipment or make capital expenditures of any kind at humane, reformatory or penal institutions wholly maintained by the state of Connecticut', and $2,000,000 to be used to eliminate fire hazards in such institutions. During the November, 1949, special session, by Special Act No. 9, approved December 23, 1949, § 3 was repealed and then re-enacted, except that the words 'wholly or partially maintained by the state of Connecticut or under the supervision of an agency thereof' were substituted for the words 'wholly maintained by the state of Connecticut', the words 'or hospitals' were inserted after 'penal institutions' and the words 'under the direction of said committee' after the words 'be used.' The committee referred to was that existent under § 2859 of the General Statutes and consisted of the governor, the comptroller and the commissioner of finance and control. The effect of the first, and most important, of these changes was to authorize expenditures from the fund not only for state institutions but also for institutions 'partially maintained by the state' or 'under the supervision of an agency thereof.'

The New Britain Memorial Hospital is located in New Britain. Its original charter was granted by the General Assembly in 1941. 23 Spec.Laws 1112. The charter provides for the maintenance of a municipal hospital for the treatment 'of all persons suffering from chronic or other diseases who shall apply therefor,' authorizes it, as necessary for its purposes, to acquire and hold property 'free from taxation' and to dispose of it, authorizes the city of New Britain to transfer to the hospital the property and assets necessary for its proper organization, operation and maintenance, provides for the appointment by the mayor of twenty-five corporators and for the annual election by them of a board of from seven to twelve directors, and gives the board of directors 'power to manage and conduct all the business and affairs of the corporation * * * and to do all acts necessary and proper to be done for the full and effectual carrying out of the purposes of [the] corporation.' The hospital's present name was adopted in 1943 by an amendment of the charter. 24 Spec.Laws 271.

On March 23, 1950, the committee constituted under § 2859 of the General Statutes allotted $3,000,000 to the commission on the care and treatment of the chronically ill, aged and infirm, a state agency under §§ 4193 and 4194 of the General Statutes, for the expansion of facilities of the New Britain Memorial Hospital. On April 4, 1950, the state, acting through this commission, duly authorized, entered into a written agreement with the hospital. This refers to the hospital's desire to expand its facilities for chronically ill, aged and infirm patients, its lack of funds to do so, and the commission's desire to provide additional buildings on the hospital's property for the care of patients for whom the commission is responsible. The agreement then provides that the state, at its expense, shall expand the facilities of the hospital upon the latter's land as the parties shall agree and approve and as directed by the committee referred to above; that the hospital shall accept title to the added facilities and shall thereafter be paid by the state for care of the state's patients, who are to have priority; that provision shall be made for the appointment by the governor of six additional hospital directors, to include two members of the commission; that the qualifications and appointment of the medical staff and the standards of care shall be subject to the commission's supervision and approval; that it may advise and counsel as to the management and operation of the facilities; and that the contract may be terminated, in which event reasonable compensation shall be paid by the party taking over the property.

Effective May 18, 1950, the charter of the hospital was amended to provide for appointment of six additional directors as called for by the agreement. Spec.Act No. 1, Sp.Sess., March, 1950. These directors were duly appointed and are serving. Subsequent to April, 1950, and pursuant to the agreement, the state through its duly authorized agent entered into two contracts with general contractors for the construction of additional facilities and the grading of the site at the hospital, and has paid them in excess of $200,000. Because of a question as to the constitutionality of the expenditure of state funds on privately owned property, further payments to the contractors were withheld and this action was brought.

These further facts are stipulated, relating not only to the New Britain Memorial Hospital but to all the institutions upon the property of which it is planned and intended that institutional buildings will be erected and capital improvements will be made by the state: The corporations are without capital stock, are not organized for profit and are tax exempt; their property is solely and permanently devoted to humane, reformatory or penal purposes; they are managed by members of boards, none of whom receives any financial gain or any remuneration beyond reasonable compensation for expenses and services actually performed; the expenditures made and planned to be made will serve a public purpose in enabling the state to provide care and treatment for the aged and chronically ill and for other persons who would properly be treated and cared for in a state institution.

Before we can determine whether § 3 of the bond act and what was done pursuant to it with relation to the New Britain Memorial Hospital involved a violation of § 1 of article first of the Connecticut constitution, we must consider certain relevant statutory provisions. As appears from what we have already stated, a bond issue of $17,000,000 was duly authorized, the committee under § 2859 was empowered to allot the amounts to be expended, and the commission on the care and treatment of the chronically ill, aged and infirm was accorded certain powers and duties. While it is stipulated that the state, 'acting through [this] Commission * * * duly authorized,' entered into the contract with the New Britain Memorial Hospital, § 4194 of the General Statutes contains a provision that the 'commission * * * shall plan and subject to the approval of the general assembly, construct or purchase, lease or otherwise acquire * * * and staff and operate, such buildings as it deems necessary for the care of' chronically ill, aged and infirm persons. This requirement of approval by the General Assembly would effectively nullify the stipulation quoted, since such approval was never obtained for the contract with the hospital, were it not for the provision in § 3 of the bond act that not more than $15,000,000 of the proceeds of the sale of the bonds 'shall be used under the direction of' the committee under § 2859 for acquiring buildings or making capital expenditures as specied. Section 4194, originally § 612h of the 1945 Supplement, became law June 23, 1945. Since § 3 of the bond act was approved December 23, 1949, it was effective to supplant the earlier requirement of § 4194 for approval by the General Assembly, and the action by the committee created by § 2859 therefore sufficed.

The provisions of the hospital's charter leave no doubt that it is a 'hospital' within the terms of § 3 of the bond act and that its board of directors had authority to execute the contract with the state to provide additional facilities. Furthermore, the terms of the contract were sufficient to bring the hospital within the act's provision 'partially maintained by the state of Connecticut.' It was not essential that such maintenance should have existed prior to the execution of the contract, since it made provision therefor for the future. There is the more reason for so holding in this case because the wording of the contract shows that it likewise guarantees that the hospital will be 'under the supervision of an agency' of the state, thus fulfilling also the alternative provision of the statute. The amendment of the hospital's charter and the appointment thereunder by the governor of the six additional directors to its board, in compliance with the contract, afford the added assurance that such supervision is to be effective. Therefore, the contract was valid unless § 3 of the bond act...