Parker v. Port Huron Hospital

Carr, J.

(dissenting). Plaintiff administrator’s decedent entered the defendant hospital on January *30 27, 1952, for surgery. A sample of her blood, was taken which, unfortunately was labelled incorrectly by said defendant’s employee, a laboratory technician. A blood transfusion for Mrs. Parker was deemed necessary and given. As a result of the error in labelling decedent’s blood sample the wrong type of blood was used and the transfusion thereof resulted in the death of the patient.

Plaintiff brought suit against the hospital and the individual defendants who were the surgeons caring for Mrs. Parker, asserting in his declaration that the death was a result of negligence on the part of defendant hospital’s employees, and on the part of said surgeons, and that said defendants were liable for damages based on such negligence. Plaintiff also sued in his individual capacity to recover damages sustained by him because of expenditures necessitated in the care and treatment of Mrs. Parker. Defendant hospital filed answers to the declarations, denying plaintiff’s claims of negligence and asserting further by way of affirmative defense that it was a nonprofit charitable organization, that Mrs. Parker was a patient in its hospital and the beneficiary of its services, and that it was not subject to liability on the ground of negligence on the part of its agents, servants, or employees.

The cases were tried together. Following the introduction of proofs on the trial, the circuit judge submitted the cases to the jury, charging, insofar as the hospital was concerned, that it was liable to respond in damages if the jury concluded from the proofs that the negligence of its employee was a proximate cause of the death. The jury returned a verdict in plaintiff Parker’s case against the defendant hospital in the sum of $548 and awarded in the suit brought by the administrator for damages under the death act the sum of $20,000. Motions for judgments notwithstanding the verdicts were submitted *31 and denied, as were motions for a new trial. The jury found that the surgeons who were defendants in the case were not liable and as to them the judgments entered accorded with such finding.

The hospital has appealed, claiming that the trial court was in error in rejecting its claim that it was exempt from liability under the facts in the case because of its status as a nonprofit charitable organization. It is further claimed on behalf of said appellant that the trial court committed prejudicial error in admitting, over objection, testimony relating to the claimed incompetence of an employee of the hospital not shown to have had any connection with the treatment of Mrs. Parker or the erroneous label-ling of the blood sample which resulted in the use of an improper type of blood in the transfusion. Mr. Justice Kavanagh has written for affirmance of the judgments on the theory that institutions of the character of the defendant should be held liable for acts of negligence on the part of their employees, notwithstanding that they are nonprofit and charitable organizations, and that the rule that has heretofore obtained in Michigan of nonliability for such cause should be abrogated by this Court. With such conclusion we are unable to agree.

The record before us clearly establishes that the Port Huron Hospital is a nonprofit organization and that it comes fairly within the scope of the concept of a charitable institution. The evidence offered on the trial in circuit court in this respect was not controverted. In its behalf attention is called to the fact that in 1948 an agreement was made between the hospital and the city of Port Huron whereby the contagious disease hospital of the municipality was taken over by the appellant and conducted as a part of its facilities. It is argued that this transaction amounted to an unequivocal recognition as to the public purposes and services of the appellant. It *32 appears also that in recent years its facilities have been enlarged and equipped at a total cost of more than $650,000. Of such sum approximately $400,000 was raised by popular subscription, and grants were made by the Federal government of about $200,000. It further appears that the hospital has received additional contributions, charitable in nature, from the Ford Foundation and from other sources, the total amount thereof, as shown by the proofs, approximating the sum of $300,000. Because of such assistance appellant has been able to extend its services to render a larger measure of benefits to the people of the community.

It has been uniformly recognized by the courts of this State up to the present time that an organization of the character of the defendant, formed and maintained with no purpose of private gain but to the end that those in need of surgical and medical attendance might receive proper treatment, and deriving a part of its resources from charitable gifts, cannot be held liable for injuries to a patient on the ground of negligence on the part of an employee or employees. In Downes v. Harper Hospital, 101 Mich 555 (25 LRA 602, 45 Am St Rep 427), this Court unequivocally recognized that such was the law of Michigan. In that case plaintiff’s decedent, while being cared for and treated by the hospital for a mental ailment, committed suicide by throwing himself out of a window from which he had managed to tear out a protective grating. There, as in the case at bar, it appeared that the defendant was organized not for private gain but for the proper treatment and care of those needing medical assistance. It was the recipient of property and funds given to it to enable it to carry out the purposes for which it was formed as an eleemosynary institution. It was recognized that money or property so received constituted a trust fund to be used solely for the purposes for *33 'which it was given. Since the holding in this case has been followed in subsequent decisions, we quote from the opinion as follows (pp 559, 560):

“If the contention of the learned counsel for the plaintiff be true, it follows that the charity or trust fund must be used to compensate injured parties for the negligence of the trustees, or architects and builders, upon whose judgment reliance is placed as to plans and strength of materials; of physicians employed to treat patients; and of nurses and attendants. In this way the trust fund might be entirely destroyed, and diverted from the purpose for which the donor gave it. Charitable bequests cannot be thus thwarted by negligence for which the donor is in no manner responsible. If, in the proper execution of the trust, a trustee or an employee commits an act of negligence, he may be held responsible for his negligent act; but the law jealously guards the charitable trust fund, and does not permit it to be frittered away by the negligent acts of those employed in its execution. The trustees of this fund could not by their own direct act divert it from the purpose for which it was given, or for which the act of the legislature authorized the title to be vested in the defendant. It certainly follows that the fund cannot be indirectly diverted by the tortious or negligent acts of the managers of the fund, or their employees, though such acts result in damage to an innocent beneficiary. Those voluntarily accepting the benefit of the charity accept it upon this condition.

“The fact that patients who are able to pay are required to do so does not deprive the defendant of its eleemosynary character, nor permit a recovery for damages on account of the existence of contract relations. The amounts thus received are not for private gain, but contribute to the more effectual accomplishment of the purpose for which the charity was founded. The wrong-doer, in a case of injury, but not the trust fund, must respond in damages.. *34 This proposition seems too clear to require argument or authority. It is not, however, inappropriate to remark that better facilities for the care, cure, and treatment of the sick, both of the poor and of those who are able to pay, are secured by the establishment of hospitals like that of the defendant. These facilities are increased by the receipt of money from those who are able to pay in whole or in part for the benefits received. Several hospitals of this character exist in this State, founded by private munificence. Obviously, they would not have been founded if their donors had known, or ever supposed, that their charitable purposes might be thwarted by the verdicts of juries for the negligent acts of those who must necessarily be employed in the execution of the charity. The following authorities appear to sustain the above position: Heriot’s Hospital v. Ross, 12 Clark & F 507 (8 Eng Rep 1508); McDonald v. Massachusetts General Hospital, 120 Mass 432 (21 Am Rep 529); Gooch v. Association, 109 Mass 558; Perry v. House of Refuge, 63 Md 20 (52 Am Rep 495); Union Pacific R. Co. v. Artist (CCA 8), 9 CCA 14 (60 F 365, 23 LRA 581).”

In connection with the decision in the Downes Case it is of interest to note the opinion of the Court in Bruce v. Central Methodist Episcopal Church, 147 Mich 230, 246 (10 LRA NS 74, 11 Ann Cas 150). The Court there referred, apparently with approval, to Powers v. Homœopathic Hospital (CCA 1), 47 CCA 122 (109 F 294, 65 LRA 372), in which it was held that the defendant hospital was not liable to respond in damages for the acts of its employees on the theory that there was an implied agreement between the hospital and the patient, arising from the acceptance by the latter of the defendant’s services, that there should be no such liability. It is also of interest to note that the Federal court recognized that the individuals guilty of the acts of negligence might be required to respond in damages.

*35 The Downes Case was followed in Pepke v. Grace Hospital, 130 Mich 493 , in which it was held that the trial court was correct in directing a verdict for the defendant hospital, a charitable institution. Like conclusion was reached in Bruce v. Henry Ford Hospital, 254 Mich 394 , in which the Court quoted with approval from the opinion in Downes v. Harper Hospital, supra. In Greatrex v. Evangelical Deaconess Hospital, 261 Mich 327 ( 86 ALR 487 ), the action of the trial court in directing a verdict in favor of defendant hospital, a Michigan nonprofit corporation, was upheld, the Court discussing the matter at some length and citing numerous decisions from other States. The following excerpt from the opinion (p 333) fairly indicates the line of reasoning of the Court:

“In directing a verdict for defendant, the trial judge correctly stated that there was no legal redress for the very grievous wrong done plaintiff; that the great good generally accomplished by a hospital and the private contributions given for its support should not be impaired or even entirely deleted by responsibility for the occasional lapses of its employees.”

In DeGroot v. The Edison Institute, 306 Mich 339 , the defendant was organized as a nonprofit corporation for the dissemination of historical, scientific, sociological, and artistic information, and in general to advance the cause of education. Plaintiff sustained a personal injury while on the premises of the defendant, as a result of falling from a horse-drawn vehicle. The action for damages was based on the claim that there was negligence on the part of defendant’s employees. It was recognized in the case that the question as to defendant’s legal status as a charitable corporation and its liability for the torts of its agents were matters to be determined by the court. The jury returned a verdict in favor of *36 plaintiff which the circuit judge presiding at the trial set aside on the ground that there was no liability on the part of the defendant because of its character and the nature of the service that it was rendering to the public. In affirming the entry of judgment for defendant, it was said by Mr. Justice North who wrote the unanimous opinion of the Court (p 345):

“In this jurisdiction it is well settled that eleemosynary institutions are exempt from such liability as is asserted in the instant case. ,Such a rule was adopted for the protection of those institutions and should it be desirable to depart from that rule, it should be done by legislative action.”

In accord with the prior decisions is Erwin v. St. Joseph’s Mercy Hospital of Detroit, 323 Mich 114 . There the action was brought by plaintiff administra-trix to recover damages for alleged improper treatment of her decedent as a patient in defendant hospital. A motion to dismiss the case was filed on the ground that defendant was a nonprofit, eleemosynary, and charitable institution which as a matter of law was not liable for the alleged torts on the part of its employees. Citing prior decisions relating to the question, the order of the trial court was affirmed. The Court declined to accept the argument of counsel that the immunity doctrine as applied to hospitals like the defendant in the case should be disregarded, saying:

“We are not convinced that the doctrine of immunity of charity hospitals from tort liability as announced in the above cases should be changed by the court.”

As appears from the above cases, it has been the consistent position of this Court that the rule of immunity of nonprofit charitable institutions heretofore obtaining in this State should not be- changed *37 by the Court, and that tbe matter is one, if such result is deemed desirable, for tbe consideration of tbe legislature. Involved are questions of public policy with which the law-making department of the State is concerned. That hospitals organized as is the defendant, and carrying on their operations in the interest of the public welfare, are serving a necessary public purpose is obvious. The practical necessity for the maintenance of adequate hospital facilities for the care and treatment of afflicted patients in need thereof is even more apparent at the present time than it has been in the past. Basically the rule that has heretofore been observed in the State was calculated to encourage the formation and maintenance of such institutions. The question as to whether they should be subjected to liability for acts of negligence on the part of their employees presents «a matter to which careful consideration should be given. We are in accord with the prior position taken by this Court that if any change in the rule is to be made, or if it is to be wholly abrogated, action, in that regard should be taken by the legislature and. not by the Court.

While not directly involved in the determination, of the instant controversy, it is of interest to note that the legislature of the State has by affirmative action expressly exempted from taxation the property of organizations like the appellant. A provision of the general property tax law found in CLS 1956, §211.7 * (Stat Ann 1959 Cum Supp §7.7), 4th subdivision, expressly recognizes and declares the public policy of the State in this regard. To said section there was added by PA 1952, No 54, for the purpose of obviating any question that might arise with reference to the exemption of such hospitals from taxa *38 tion, the following inclusion in the list of declared exemptions :

“Also real estate, with the buildings and other property thereon, owned and occupied by any nonprofit trust and used for hospital or public health purposes.”

The application of said provision was before this Court in In re Dearborn Clinic and Diagnostic Hospital, 342 Mich 673 . See, also, with reference to the State policy, relating to exemptions from taxation of nonprofit organizations, Gull Lake Bible Conference Association v. Township of Ross, 351 Mich 269 .

In view of the action of the legislature in exempting from taxation the property of organizations of the class to which appellant in the instant case belongs, the conclusion follows that the declared public policy of the State is to encourage the formation anci operation of nonprofit charitable hospitals created and existing for the care and treatment of members of the public generally. The fact that such institutions customarily collect from patients who are able to pay for such services does not alter the situation ,with respect to the public nature of the hospitals furnishing such facilities. It cannot be denied that they are essential to the well-being of the public. In our opinion the matter of a change in the policy heretofore existing should be left to the legislature of the State for determination.

The trial court was in error in submitting the case to the jury on the theory that defendant hospital was liable for damages if the negligent act of an employee was a proximate cause of the death of plaintiff’s decedent. The judgments should be reversed and the cases remanded to the circuit court with direc *39 tions to enter there judgments in favor of the defendant hospital.

Dethmers, C. J., and Kelly, J., concurred with Carr, J.

Black, J., did not sit.

Amended by PA 1958, No 190, and by PA 1960, No 155.