Truitt v. Board of Public Works

• Decision Date: 24 June 1966
• Docket Number: No. 56,56
• Citation: 243 Md. 375,221 A.2d 370
• Parties: C. Gregory TRUITT et ux. v. BOARD OF PUBLIC WORKS of Maryland, et al.
• Court: Maryland Court of Appeals

Page 375

243 Md. 375

221 A.2d 370

C. Gregory TRUITT et ux. v. BOARD OF PUBLIC WORKS of Maryland, et al.

No. 56.

Court of Appeals of Maryland.

June 24, 1966.

Concurring Opinion July 22, 1966.

Victor H. Laws, Salisbury, for appellants.

Alan M. Wilner, Asst. Atty. Gen. (Thomas B. Finan, Atty. Gen., on the brief), for appellees Board of Public Works, Comptroller of Treasury, State Treasurer and Maryland Hospital Commission.

Francis D. Murnaghan, Jr., Baltimore, (Paul S. Sarbanes, Baltimore, on the brief), for appellee Greater Baltimore Medical Center, Inc.

Alexander Harvey, II, Baltimore, for appellee Church Home & Hospital of City of Baltimore.

Francis X. Gallagher, Baltimore (John C. Evelius, Joseph G. Finnerty, Jr., Baltimore, and Alfred L. Scanlan, Washington, D. C., on the brief), for appellees The Sisters of Third Order of St. Francis, Philadelphia Foundation of St. Joseph Hospital.

Before PRESCOTT, C.J., and HAMMOND, HORNEY, MARBURY, OPPENHEIMER, BARNES and McWILLIAMS, JJ.

OPPENHEIMER, Judge.

This appeal from a decree in a declaratory judgment proceeding in the Circuit Court of Baltimore City involves the constitutionality and validity of the Hospital Construction Loan Act of 1964. The appellants, the plaintiffs below, are owners of Maryland real estate and residents and taxpayers of Maryland. The appellees, defendants, are Greater Baltimore Medical Center, Inc. (Greater Baltimore), Church Home and Hospital of the City of Baltimore (Church Home), Sisters of the Third Order of St. Francis, Philadelphia Foundation of St. Joseph's Hospital, Baltimore, Maryland (St. Joseph's), (hereafter collectively referred to as the hospitals); and the Board of Public Works (the Board), the Comptroller and the Treasurer of the State of Maryland and Maryland Hospital Commission (the Commission), (hereafter collectively referred to as the State). ¹

The Hospital Construction Loan Act of 1964 (Ch. 138, Laws of 1964, as amended Ch. 792, Laws of 1965) (the Act) authorizes the creation of a State debt of $50,000,000 for the purpose of assisting in the financing of construction, expansion, relocation replacement and modernization of the facilities and equipment of voluntary, nonprofit hospitals. The Act also creates the Commission which receives applications for State loans from hospitals, ascertains whether the hospital is eligible under the Act and whether the requested loan is in accordance with the purpose of the Act, and makes recommendations thereon to the Board. ² The rate of interest of the loans is to be the rate of interest borne by the issue of general credit obligations of the State last sold prior to the grant of loan funds plus an additional rate of interest equal to one-eighth of one per cent per annum. The term of any loan may be up to 40 years.

The Commission received a number of applications from various hospitals throughout the State. Of these applications, one was from Greater Baltimore for a loan of $7,000,000; one was (as amended) from Chuch Home for a loan of $462,000; and one was from St. Joseph's for a loan of $7,500,000. After investigation the Commission approved these three applications, subject to certain reservations, and recommended them to the Board. On September 17, 1965, the Board approved a loan of $25,000 to each of the three hospitals.

Subsequent to the decision of the lower court in this case, the General Assembly amended the Act by providing that the Hospital Construction Loan of 1964 shall consist of two separate and distinct loan funds; each in the amount of $25,000,000: one to be used for loans to hospitals not affiliated with a church or religious denomination, and the other to be used for hospitals so affiliated (the 1966 amendment). In the event this Court declares the Act constitutional, the 1966 amendment will be automatically repealed 30 days thereafter (Ch. 714, Laws of 1966).

At the hearing below, testimony was taken and a number of exhibits and stipulations were filed. In a comprehensive opinion, Judge Harris held the Act constitutional and valid in all respects.

The appellants contend here, as they contended below, that they have standing to sue; that the Act results in an establishment of religion forbidden by the Maryland and federal Constitutions and prohibits the free exercise by the appellants of their religion in violation of the First Amendment and requires the appellants to contribute to a place of worship and a ministry in violation of the Declaration of Rights; that the loans to the hospitals are invalid because the State Treasurer, who is a member ex officio of the Board, approved the hospital loans attacked in this case, although he was also a member of the Board of Trustees of Church Home; that the loans to the hospitals are not for a public purpose and are otherwise in violation of the Maryland Constitution; that the purported delegation of power to administrative officials in the Act is unconstitutional because adequate standards are not provided; and that the action taken in respect of Greater Baltimore and St. Joseph's is a 'refinancing' forbidden by the Act.

All the parties adopted the Findings of Fact Nos. 1 through 14, made by the court below. The substance of the first four findings has been given above. Findings 5 through 14 are as follows:

'5. Greater Baltimore is a voluntary, nonprofit hospital. It is the result of a joint undertaking by the former Presbyterian and Women's Hospitals, each of which had formerly conducted specialized operations, in an effort to combine their specialties and create a new general hospital. Greater Baltimore itself is a separate eleemosynary corporation, whose members originally consisted of the members of the Board of Directors of Women's and the Board of Governors of Presbyterian. The corporation is governed by a Board of Trustees of thirteen members of which, according to the Charter, one-third are to be selected from persons nominated by the members who are directors of Women's, one-third are to be selected from persons nominated by members who are governors of Presbyterian, and one-third are to be selected from the public at large. All of the Trustees selected from nominees of the directors of Presbyterian Hospital have a Presbyterian religious affiliation.

'6. Greater Baltimore has a completely nonsectarian policy with regard both to the admission and treatment of patients and to the hiring of all personnel. The patient admission form provides a space in which religious affiliation may be indicated, as does the chaplaincy service form which is filed out upon the patient's admission, but such designation is without significance to the hospital. Greater Baltimore has designated a portion of its facilities, comprising 68 of its 400 beds, as the 'Presbyterian Hospital Section'. This section consists of the departments of otolaryngology and ophthalmology, the specialties formerly conducted by Presbyterian, but the name 'Presbyterian' has no other significance in connection with such section.

'7. The agreement between Presbyterian and Women's under which Greater Baltimore came into being, was executed September 15, 1960. Greater Baltimore itself was incorporated on October 7, 1960. The contract for general construction of the new facilities was let on July 7, 1964, and said construction was substantially completed by September 15, 1965, at which time Greater Baltimore took possession of the premises and commenced operations therein. Pending final action on its application by the Maryland Hospital Commission and the Board of Public Works, Greater Baltimore has borrowed $7,500,000 from five banks on a demand note basis.

'8. St. Joseph's is a voluntary, nonprofit hospital owned and operated by the Sisters of the Third Order, etc., a Catholic monastic order. It is incorporated as an eleemosynary corporation under the laws of Maryland. It is governed by a Board of Trustees of five members, all of whom are members of the Order. There is also an Inter-Denominational Advisory Board of 26 members, nineteen of whom at the present time are Catholic.

'9. St. Joseph's has a completely nonsectarian poilicy with regard both to the admission and treatment of patients and to the hiring of all personnel. The patient admission form contains a space for religious affiliation, but such designation is for informational purposes only and is without significance here. It is made available to ministers of all faiths, for patient visitation and spiritual consultation.

'10. The contract for the construction of the new St. Joseph's facilities was awarded on April 4, 1964. The facilities were substantially completed by November 28, 1965, at which time St. Joseph's took possession of them and commenced operations therein. Pending final action on its application by the Commission and the Board of Public Works, St. Joseph's borrowed $6,500,000 from two banks on a note originally due March 31, 1966, but which has been extended to December 31, 1966. Of this amount, $4,000,000 was guaranteed by the Roman Catholic Archbishop of Baltimore. The Sisters of the Third Order have offered to lend St. Joseph's $1,000,000, which would have to be repaid over a period of time and at a rate of interest not determined. This money would be taken from the building funds of other hospitals operated by the Order. If the loan is made, then the loan applied for from the State could be reduced by $1,000,000.

'11. Chuch Home is a voluntary, nonprofit hospital. It was incorporated by lay members and clergy of the Protestant Episcopal Church and is governed by a Board of Trustees of 33 members, of whom 10 are clergymen of the Episcopal Church and 19 are lay members thereof. All but one of the 13 members of the Executive Committee are members of the Episcopal Church.

'12. Church Home has a completely nonsectarian policy with regard both to the admission and treatment of patients and to the hiring of all personnel. The patient admission form contains a space...