St. Mary's Academy of Sisters of Loretto of City of Denver v. Solomon

• Decision Date: 01 June 1925
• Docket Number: 11003.
• Citation: 238 P. 22,77 Colo. 463
• Court: Colorado Supreme Court
• Parties: ST. MARY'S ACADEMY OF SISTERS OF LORETTO OF CITY OF DENVER et al. v. SOLOMON.

238 P. 22

77 Colo. 463

ST. MARY'S ACADEMY OF SISTERS OF LORETTO OF CITY OF DENVER et al. v. SOLOMON.

No. 11003.

Supreme Court of Colorado

June 1, 1925

Department 3.

Error to District Court, City and County of Denver; Charles C Butler, Judge.

Action by Frank Solomon against St. Mary's Academy of the Sisters of Loretto of the City of Denver and others. Judgment for plaintiff, and defendants bring error.

Affirmed.

John T. Bottom, of Denver, for plaintiffs in error.

H. A Calvert, Jacob J. Lieberman, and Charles Rosenbaum, all of Denver, for defendant in error.

DENISON J.

Defendant in error was a passenger guest in the automobile driven by Mrs. Newhagen, mentioned in our opinion in St. Mary's Academy v. Newhagen 238 P. 21, which was argued with this case. We there held that Mrs. Newhagen was guilty of contributory negligence which was imputed to her husband, and we reversed the case accordingly.

In the present case the plaintiff below had judgment for $6,000 for expenses and loss of society caused by injury to his wife who, with him, was a guest in the Newhagens' car.

First. The claim is made that defendant corporations are not liable for torts because they are charitable institutions.

The question is a new one in this court. The conclusions in the decisions in England, Canada, and America are many and hopelessly different; the arguments by which they are reached are more so, and are confused by resort to the analogy of the liability or nonliability of governments and governmental agencies. On the one extreme it is held that a charitable institution is not liable for torts at all and on the other that it is liable for torts like any other person.

Between we find it held that it is liable to strangers, third persons they are usually called, but not to its own beneficiaries; also that it is liable to its employees, but not to its own beneficiaries; again, that, it is liable only for negligently selecting incompetent servants, but not for the tort of a servant selected without negligence. Some base their judgment on a denial of the application of the rule of respondeat superior, and those which hold the charity liable only to persons other than its beneficiaries seem to base their decision on implied consent of one receiving a charity that the giver shall not be liable for negligence. Each party has attempted to persuade us that its side represents the trend of modern decision, but we do not find that to be true; on the contrary, there are two parallel lines of cases, reaching back three-quarters of a century or so, and coming down to the present time, sometimes varying in the same jurisdiction, according to the judgment, bias, or prejudice of the court having the matter in hand or the judge writing the opinion.

The leading English case holding the exemption is Heriot's Hospital v. Ross, 12 Cl. & F. 507, followed in Fordyce v. Woman's Library, 79 Ark. 550, 96 S.W. 155, 7 L.R.A. (N. S.) 485; Johnston v. Chicago, 258 Ill. 494, 101 N.E. 960, 45 L.R.A. (N. S.) 1167, Ann.Cas. 1914B, 339; Parks v. N.W. University, 218 Ill. 381, 75 N.E. 991, 2 L.R.A. (N. S.) 556, 4 Ann.Cas. 103; Jensen v. Maine Eye & Ear Infirmary, 107 Me. 408, 78 A. 898, 33 L.R.A. (N. S.) 141; Perry v. House of Refuge, 63 Md. 20, 52 Am.Rep. 495; Whittaker v. St. Luke's Hospital, 137 Mo.App. 116, 117 S.W. 1189; Adams v. University Hospital, 122 Mo.App. 675, 99 S.W. 453; Gable v. Sisters of St. Francis, 227 Pa. 254, 75 A. 1087, 136 Am.St.Rep. 879; Fire Ins. Patrol v. Boyd, 120 Pa. 624, 15 A. 553, 1 L.R.A. 417, 6 Am.St.Rep. 745; Vermillion v. Due West Woman's College, 104 S.C. 197, 88 S.E. 649; Lindler v. Columbia Hospital, 98 S.C. 25, 27, 81 S.E. 512; Abston v. Waldon Academy, 118 Tenn. 24, 102 S.W. 351, 11 L.R.A. (N. S.) 1179. Massachusetts, which formerly, it was claimed, qualified this view, has gone over to it. Foley v. Wesson Memorial Hospital, 246 Mass. 363, 141 N.E. 113, and cases there cited. Rhode Island has done the same by statute.

These cases and others hold that there is no liability for tort, principally on the ground that it works a misapplication of the trust fund. With this proposition we agree. The principal argument against it is that it permits the creator of the trust to nullify or evade the law, and makes the right of the beneficiaries of the charity superior to the rights of innocent sufferers from the negligence of the trustee. Though apparently strong, this argument is inherently weak. It begs the question. The question is: What is the law? What are the rights of the sufferers? But this argument assumes the law to be that the sufferer has the right to recover for the tort of a charitable institution. If he has, the creator of the trust cannot nullity it or evade the law; if he had not, then it is the law and not the creator of the trust that deprives him thereof. The fundamental question is one of expediency or of public policy--whether the preservation of charitable trust funds is more desirable than a right to compensation from such funds for an injury. We think it is. Few things are more desirable or more beneficial to the public than charitable foundations, and certainly the right of some one to recover damages from a particular source is not one.

Again, if we say that a judgment in tort may be permitted against a trustee and enforced against the charitable trust fund, we cannot deny that he might pay the damages out of that fund without judgment, which would put trust funds in a somewhat precarious position.

In Downes v. Harper Hospital, 101 Mich. 555, 60 N.W. 42, 25 L.R.A. 602, 45 Am.St.Rep. 427, a case of injury to a patient, the Supreme Court of Michigan held the hospital not liable, and, as one of the grounds of the decision, said that the trust fund could not be depleted; but in Bruce v. Central M. E. Church, 147 Mich. 230, 110 N.W. 951, 10 L.R.A. (N. S.) 74, 11 Ann.Cas. 150, it was held that a charitable institution was liable to a stranger, distinguishing Downs v. Hospital, supra, and claiming not to overrule its reasoning; but we think it really does so. In Hewett v. Woman's Hospital Aid Ass'n, 73 N.H. 556, 64 A. 190, 7 L.R.A. (N. S.) 496, 6 Ann.Cas. 413, a corporation was held liable for negligent injury to nurse, employee, on the ground that it was presumed that the creator of the trust fund knew that it might be required to pay damages for torts. This again is begging the question; of course that was true if the law required the trustee to pay damages for torts--if not, not.

It is claimed that the English case above cited has been overruled in that country by Mersey Docks Trustees v. Gibbs, 11 House of Lords, 686, 11 Reprint Law Reports, 1500. The latter case, however, does not involve the question of a charitable trust, but of a public board, and, we think, does not overrule Heriot's Hospital v. Ross, but questions the universality of the rule there laid down by Lord Cottenham, and declares the proposition that the liability of an administrator of a public trust depends on the terms of the act establishing it, and the inferences to be drawn therefrom. See pages 720 and 721. See, also, Fordyce v. Woman's Library, supra, pp. 558, 559 (96 S.W. 155).

In the case last cited...