Levin v. Sinai Hospital of Baltimore City, Inc.

• Decision Date: 15 March 1946
• Docket Number: 92.
• Parties: LEVIN v. SINAI HOSPITAL OF BALTIMORE CITY, Inc.
• Court: Maryland Court of Appeals

46 A.2d 298

186 Md. 174

LEVIN v. SINAI HOSPITAL OF BALTIMORE CITY, Inc.

No. 92.

Court of Appeals of Maryland

March 15, 1946

Appeal from Circuit Court of Baltimore City; Emory H. Niles, Judge.

Suit by Morris B. Levin against Sinai Hospital of Baltimore City Incorporated, to obtain an injunction restraining the defendant hospital, its officers and agents, from interfering with plaintiff's right to treat patients in private and semiprivate rooms of hospital. From a decree sustaining defendant's demurrer and dismissing the amended bill plaintiff appeals.

Decree affirmed.

Walter V. Harrison, of Baltimore (Milton S. Goldbloom, of Baltimore on the brief), for appellant.

Samuel J. Fisher and Joseph Bernstein, both of Baltimore, for appellee.

Before MARBURY, C.J., and DELAPLAINE, COLLINS, GRASON, and HENDERSON, JJ.

DELAPLAINE Judge.

This suit was brought by Dr. Morris B. Levin to obtain an injunction against Sinai Hospital of Baltimore, Incorporated. The amended bill of complaint alleges: (1) that defendant is a non-profit, eleemosynary, non-sectarian institution, exempted from taxation on its building and equipment, and receiving appropriations from the State and the City of Baltimore, and contributions from Associated Jewish Charities and individuals; (2) that he has been practicing medicine ever since he received his degree of Doctor of Medicine in 1914, and for many years has been a member of the visiting staff of Sinai Hospital, which entitled him to treat his patients in either the private or semiprivate rooms; (3) that in November, 1943, he was notified that he had been dropped from the visiting staff, but was put on the courtesy staff, entitling him to treat patients in the private rooms; (4) that the rules and regulations of the medical board, the governing body of the medical staff, which were approved as by-laws by the board of officers, are arbitrary and discriminatory, as he has been refused private rooms for his patients on many occasions, and the object of the creation of the courtesy staff was to limit the privileges of the hospital to a small group of physicians who were empowered 'to make a private sanitarium of this public institution'; (5) that the rules and regulations of the medical staff constitute a restraint of trade in violation of the Sherman Anti-Trust Act, 15 U.S.C.A. §§ 1-3, in that defendant's officers and agents have combined and conspired to prevent him from treating his patients in the semi-private rooms; and (6) that the action of defendant, its officers and agents, has restricted the practice of his profession and injured his reputation and professional standing. Complainant prays the court to declare the rules and regulations of the medical board illegal and void, and to enjoin the hospital, its officers and agents, from interfering with his right to treat patients in its private and semi-private rooms. He is appealing from a decree sustaining the hospital's demurrer and dismissing the amended bill.

The essential difference between a public and a private corporation has long been recognized at common law. A public corporation is an instrumentality of the State, founded and owned by the State in the public interest, supported by public funds, and governed by managers deriving their authority from the State. Public institutions, such as State, county and city hospitals and asylums, are owned by the public and are devoted chiefly to public purposes. On the other hand, a corporation organized by permission of the Legislature, supported largely by voluntary contributions, and managed by officers and directors who are not representatives of the State or any political subdivision, is a private corporation, although engaged in charitable work or performing duties similar to those of public corporations. Trustees of Dartmouth College v. Woodward, 4 Wheat. 518, 4 L.Ed. 629, 667; Regents of University of Maryland v. Williams, 9 Gill & J. 365, 388, 31 Am.Dec. 72; Hughes v. Good Samaritan Hospital, 289 Ky. 123, 158 S.W.2d 159. So, a hospital, although operated solely for the benefit of the public and not for profit, is nevertheless a private institution if founded and maintained by a private corporation with authority to elect its own officers and directors. Washingtonian Home of Chicago v. City of Chicago, 157 Ill. 414, 41 N.E. 893, 29 L.R.A. 798.

Using this test we find from the allegations of the amended bill that defendant is a private institution. It was organized as a private corporation, and it is not an instrumentality of the government for the administration of public duties. It is admitted that defendant is exempt from taxation on its hospital building and equipment, and receives appropriations from the State and the City of Baltimore. But it cannot be questioned that the Legislature has ample power to make appropriations to a private corporation established for the maintenance of a hospital. Finan v. City of Cumberland, 154 Md. 563, 141 A. 269. From the beginning of the State Government, the Legislature has constantly made donations to special objects without regard to race, creed, or class. As Judge Bryan said in State ex rel. Clark v. Maryland Institute, 87 Md. 643, 663, 41 A. 126, 130: 'The only condition limiting this exercise of this power is that it must in some way promote the public interest. The state has never surrendered this power to the general government, and never can surrender it without stripping itself of the means of providing for the good order, happiness and general welfare of society. The benefits conferred in this way are matters of grace and favor which the state bestows on its own citizens for worthy public reasons.'

It is not necessary on this appeal to consider the question of the extent of a physician's constitutional right to practice his profession in a public hospital. The powers and duties of the officers of a public institution are regulated by statute or municipal ordinance. The powers and duties of the officers of a private corporation are regulated by its charter constitution and by-laws. It is a general rule that a court of equity will not interfere with the internal management of a corporation, unless the act complained of is fraudulent, illegal or ultra vires. Williams v. Salisbury Ice Co., 176 Md. 13, 26, 3 A.2d 507; Murray-Baumgartner Surgical Instrument Co. v. Requardt, 180 Md. 245, 23 A.2d 697. We hold that a private hospital has the right to exclude any physician from practicing therein, and such exclusion rests within the sound discretion of the managing authorities. Van Campen v. Olean General Hospital, 210 A.D. 204, 205 N.Y.S. 554, affirmed, 239 N.Y. 615, 147 N.E. 219; Hughes v. Good Samaritan Hospital, 289 Ky. 123, 158 S.W.2d 159; Henderson v. City of Knoxville, 157 Tenn. 477, 9 S.W.2d 697, 60 A.L.R. 652; State ex rel. Wolf v. La Crosse Lutheran Hospital Ass'n, 181 Wis. 33, 193 N.W. 994; 26 Am.Jur., Hospitals and Asylums, sec. 9; 41 C.J.S., Hospitals, § 9. A private hospital is not under a common law duty to serve every one who applies for treatment or permission to serve. In the absence of statute, it may accept some applicants and reject others. Likewise, the directors of a private hospital corporation, having power to appoint members of its medical staff, have the authority to remove them from the staff. It has never been the policy of the State of Maryland to interfere with the power of the governing body of a...