October 4, 1937.
A charitable institution is not fully immune from suit, but is liable for injuries resulting from negligence in selecting its agents.
A college, not using building owned by it in collegiate work, is not exempt from liability for its agents' torts in operation of such building, though revenues therefrom are devoted solely to charitable and benevolent purposes.
A charitable institution or corporation, entering into independent business apart from its charity solely for profit or to secure funds for its charitable purposes, is liable in tort for injuries caused by its agents' negligence in conduct of such business to same extent as private corporation.
An incorporated college, given no specific power by its charter to operate building subsequently donated to it or business not connected with its charity, is subject to general law as to such operation and hence liable for injuries resulting therefrom (Laws 1890, chapter 379).
APPEAL from circuit court of Hinds county. HON. J.P. ALEXANDER, Judge.
Howie, Howie McGowan, of Jackson, for appellants.
In 1876 the Supreme Court of Massachusetts handed down the case of McDonald v. Massachusetts General Hospital, 120 Mass. 432, 21 Am. R. 529. This is said to be the pioneer case on this subject in this country, and possibly the most quoted case in the decisions. The injured here was a charity patient in a purely charitable institution, partly maintained by the government and partly by charity donations. The patient had been injured by a fall from a building in which he received a fractured thigh. After he received the charity at the hospital some year later he entered suit for malpractice. Liability was refused. It was in this case that the theory for limiting liability to the careful selection of servants and agents was at first advanced.
It is said that the McDonald case followed the case of Holliday v. Leonards, 11 C.B. (N.S.) 192, a Canadian case, which at the time had already been overruled in certain House of Lords cases. We do not deem it practical or necessary to pursue the question into this field.
Then there followed the case of Benton v. Trustees of City Hospital, from Boston, 130 Mass. 13. Limitation of liability to careful selection of servants was reiterated in this case.
The next step in the progression in Massachusetts is the case of Davis v. Central Congregational Society, 129 Mass. 367. This case was handed down only four years later than the McDonald case, that is in 1880. The plaintiff in this case, an elderly lady, while attending a conference of the Congregational Churches in the vicinity of Boston was pursuing a path from the church to the street at night, when she stumbled over an obstruction and fell on to the sidewalk and was seriously injured. In allowing liability the Supreme Court of Massachusetts said: "The application of the rules on which the defendant's liability depends is not affected by the consideration that this is a religious society and that the plaintiff came solely for her own benefit or gratification. It makes no difference that no pecuniary profit or other benefit was received or expected by the society. The fact that the plaintiff comes by invitation is enough to impose on the defendant the duty which lies at the foundation of this liability, and that too although the defendant in giving the invitation was actuated only by motives of friendship and charity, . . . and the defendant as an incorporated religious society and as owner and occupier of the premises in question, is subject to all the duties and liabilities which are incident to the ownership and possession of real estate."
Next there is the case of Smithurst v. Barton Square Church, 148 Mass. 261, handed down by the Supreme Court of Massachusetts, November, 1888. In this case the plaintiff was injured while driving his wagon in the streets of Salem by snow falling from the roof of the defendant church, which roof overhangs the street. Recovery was had and sustained in this case.
We next cite the well known Massachusetts cases of Thornton v. Franklin Square House, 200 Mass. 465, 86 N.E. 909, 22 L.R.A. (N.S.) 486; Farragan v. Pevear, 193 Mass. 147, 78 N.E. 855, 118 A.S.R. 484, 7 L.R.A. (N.S.) 481. These cases were handed down in 1904 and 1906 respectively, and both hold with the McDonald v. General Hospital case, that the charitable institutions should be held liable for the torts of their servants only in instances where they fail to exercise care in the selection thereof.
We now come to the case of Holder v. Massachusetts Horticultural Society, 211 Mass. 370, 97 N.E. 630. Plaintiff here, an employee of the institution, was injured while assisting the superintendent of the building in repairing an elevator or dumb waiter. This case was handed down in 1912. This decision had the following effect on the law in Massachusetts. First, it abrogated the theory of no liability on the part of a charitable institution to an employee. Second, it abrogated the theory of assumption of risk. Third, it established liability where the work was dissociated from the charity.
We have the case of McKay v. Morgan Memorial Coop. Industries, Inc., a Massachusetts case handed down in 1930, appearing in 172 N.E. 68. In this case the plaintiff was injured in a building where the charitable institution was carrying on a business. Liability was allowed, although the institution was a charitable institution, on the ground that it was carrying on a commercial business for profit dissociated from the charity itself.
In New York what we have called the careful selection theory was very early established.
In the cases of Van Tassel v. Manhattan Eye and Ear Hospital, 15 N.Y.S. 620, handed down in 1891, it was held that the hospital being a charitable institution was not liable. The limitation of liability to careful selection of servants was advanced and said to be the law in New York, at that time, and from the opinion: "The defendant is not liable except for the omission to give due care to the selection of its skilled employees, surgeons, et al."
Harris v. Woman's College, 14 N.Y.S. 881; Procter v. Manhattan Eye and Ear Hospital, New York, June, 1879; Pryor v. Manhattan Eye and Ear Hospital (Sp. Ct. Spec. Term, New York Co., Nov., 1890); Eibee v. Long Island Hospital (Cir. Ct. King Co., Dec. 5, 1882, unrep.).
The case of Hordern v. Salvation Army, 199 N.Y. 233, 92 N.E. 626, 139 A.S.R. 889, 32 L.R.A. (N.S.) 62, is a very exhaustive and lengthy opinion, which traces the history of the question involved to the various jurisdictions and especially in New York. The decision was handed down in 1910. It reiterates the careful selection theory and limits recovery thereby in instances where the plaintiff is a beneficiary of the institution sought to be sued.
Having adopted this theory of the question the courts of New York have consistently followed the same. Recovery is denied to a recipient of the charity, but a stranger may recover. Persons injured by any agency dissociated from or not connected with a charity institution may recover.
Gartland v. New York Geological Society, 120 N.Y.S. 24.
In Pennsylvania the law is the same as in Massachusetts and in New York.
Fire Ins. Patrol v. Boyd, 120 Pa. 624, 1 L.R.A. 417, 6 A.S.R. 745, 15 A. 553; Winnemor v. Philadelphia, 18 Pa. Sup. 625.
We next turn to the State of Michigan. What occurred in the other states mentioned occurred in like manner here.
Downes v. Harper Hospital, 101 Mich. 555, 60 N.E. 42, 26 L.R.A. 602, 45 A.S.R. 427; Feofees of Heriots Hospital v. Ross, 12 Clark Finn, 507; McDonald v. Mass. General Hospital, 120 Mass. 432; Pepke v. Mich. Hospital, 130 Mich. 493; Bruce v. Central Methodist Ep. Church, 147 Mich. 230, 110 N.W. 951, 10 L.R.A. (N.S.) 74; Powers v. Massachusetts Homeopathic Hospital, 109 Fed. 294, 47 C.C.A. 122, 65 L.R.A. 372.
The Supreme Court of Tennessee in Gamble v. Vanderbilt University, in 1918, reported in 200 S.W. 513, completely overturned the theory of total exemption of charitable institutions in Tennessee. The plaintiff's intestate was killed by an elevator in a building in down town Nashville, which building was owned by Vanderbilt University, and a part of its endowment, a part of the building being used by the University and a part by tenants. The facts are very much the same as in the case at bar. The Supreme Court abrogated completely the question of total exemption and held the University liable.
In our sister jurisdiction of Louisiana the question took about the same course in Thibodeaux v. Sisters of Charity, etc., 11 La. App. 423, 123 So. 466, and in Jordan v. Turo Infirmary, 123 So. 726. The charitable institutions were held not liable on account of injury to patients. Then in the case of Bougon v. Volunteers of America, 151 So. 797, the court said: "Trust fund doctrine of non-liability of charitable organizations for torts of employees, as to persons not recipients of its charity, does not obtain in Louisiana, and hence charitable organization is liable for injuries sustained by pedestrians when struck by its truck driven by employees."
Unser v. Baptist Rescue Mission, 157 So. 298.
In 1930 in the case of Duvelius v. Sisters of Charity of Cincinnati, 174 N.E. 256, 37 Ohio App. 171, 173 N.E. 737, 123 Ohio State 52, the Ohio courts affirmed liability to one who was not a beneficiary of the charity
In 1914 the Supreme Court of Virginia handed down the case of Hospital of St. Vincent of Paul v. Thompson, 81 S.E. 13, 51 L.R.A. (N.S.) 1025, a lengthy and exhaustive opinion and upholds liability in the instance of a third party not a recipient of charity although the plaintiff was injured upon the premises of the charity hospital.
The latest Virginia case rendered in 1934 holds hospitals liable to a pay patient.
In the case of Wright v. Salvation Army, 125 Neb. 216, 249 N.W. 549, the court clearly held the charitable institution liable for damages to an invitee not a recipient of the charity.
The same course seems to have been taken in California, where in the early cases the theory of limitation of liability to careful selection was instituted. Then in 1914 the case of Thomas v. German General Benevolent Society, 168 Calif. 183, 141 P. 1186. This case followed the much quoted case of Basabo v. Salvation Army, 35 R.I. 22, 42 L.R.A. (N.S.) 1144, 85 A. 120, to the effect that only he who accepts the benefits of a charity can be barred from recovering in tort against the same. The later cases follow this point.
Alabama repudiated the exemption theory upon every reason assigned and relegated charitable institutions to a position in the category of other institutions.
Connecticut adopts almost the same theory in holding a charitable hospital liable as any other corporation for injury to a patient.
In Rhode Island the early case of Glavin v. R.I. Hospital, 12 R.I. 411, 34 Am. R. 675, took its place as a much quoted leading case on the question. By it the court of Rhode Island repudiated all claims to exemption on the part of charitable institutions from liability for torts.
The Supreme Court of Missouri after having rendered a decision in Adams v. Universal Hospital, 122 Mo. App. 675, 99 S.W. 453, in which it appeared that the trust fund theory had been undoubtedly established as against all tort actions, the court later in the case of Whittaker v. St. Lukes Hospital, 137 Mo. App. 116, 117 S.W. 1189, recognizes the right of a stranger to the charity to sue for his injuries, quoting Kellogg v. Church Foundation, 112 N YS. 566.
When we consider that the same Massachusetts court which rendered McDonald v. Mass. General Hospital, also rendered Holder v. Mass. Horticultural Society; and that the same New York court which rendered Cunningham v. Sheltering Arms later rendered Kellogg v. Church Charity Foundation; and that the same Pennsylvania court which rendered Gable v. Sisters of St. Francis ( 257 Pa. 254) also rendered Winnemore v. Philadelphia; and that the same court in Tennessee which rendered Abston v. The Academy later rendered Gamble v. Vanderbilt University, it is not hard to surmise what turn the courts in the jurisdictions which have not had before them a full complement of the cases on all facts would do when confronted with the claim of the plaintiff innocently injured in the streets by the negligence of an institution to whose charities he is an utter stranger.
Powers v. Mass. Homeopathic Hospital, 109 Fed. 294, 65 L.R.A. 372, 47 C.C.A. 122; Basabo v. Salvation Army, 42 L.R.A. (N.S.) 1148.
Although we have found no decision which says so in so many words, we urge that this court lay down the principle that the limitation of liability to the careful selection of the servant be confined only to the cases of doctors, surgeons, nurses and others who are practicing some professionalized science. At the present time, that is as far as this court has gone with this matter. The question has been touched in this state as we could find in only three cases. The first two cases James v. Y. M.V.R.R. Co., 153 Miss. 776, 121 So. 819, and Eastman Gardner Co. v. Parmenter, 111 Miss. 813, 72 So. 234, are railroad or industrial cases which simply hold that the corporation which establishes a hospital or medical department from which it draws no profit and collects monthly dues from its workmen to support the same, and turns the same over to the medical department, is not liable for the torts other than in the careful selection of said servants.
Our other case is Mississippi Baptist Hospital v. Moore, 126 So. 465. It is our contention that this case does not extend one whit the doctrine as already laid down in the James case and in the Eastman Gardner case.
There can be no reasoning adopted from all the decisions which can in any method save this defendant from liability in this case. If this court should go so far as to hold that this defendant is not liable in damages to these plaintiffs on account of its plea of being a charitable institution, it would be tantamount to say that under no circumstances whatsoever could this institution or others like it be amenable to the laws of the State of Mississippi. There simply could be no instance or set of circumstances where these institutions could be made to respect the law if it is denied in this case.
St. Paul Sanitarium v. Williamson, 164 S.W. 36; Shehan v. North Country Community Hospital, 273 N.Y. 163, 7 N.E.2d 281; Phillips v. Buffalo General Hospital, 239 N.Y. 188, 146 N.E. 199; Murtha v. New York Homeopathic Medical College, 228 N.Y. 183, 126 N.E. 722; Kolb v. Monmouth Memorial Hospital, 116 N.J. 118; Grawunder v. Beth Israel Hospital, etc., 272 N.Y.S. 171; Johnson v. Staten Island Hospital, 271 N.Y. 519.
Lastly, in the state of these pleadings this case should be reversed, even if the court should hold to the limitation of liability to careful selection of servants theory. In the state of the pleadings the case ought to go to trial even on that issue, the plea of the defendant in effect being the simple claim of total immunity, and no more.
Luther Manship, of Jackson, for appellants.
Mississippi has rejected the theory that the endowment and funds of a charity are trust funds and cannot be diverted for the purpose of paying damages occasioned by the negligence of the agents or employees of the charity, as our court has held that the charity is only exempt from liability where it has exercised due care in the selection of its employees and necessarily holds that it would be liable even to a recipient of the charity where the charity had not used due care in the selection of competent employees and also necessarily that such funds could be diverted for the payment of a judgment rendered against the charity where the recipient of the charity had been injured or damaged on account of the negligence of an employee selected without due care.
The liability of a charitable corporation for the torts of its agents and servants while administering the business of the charity is set forth in 5 R.C.L., page 374.
A charitable corporation is liable for the torts of its agents and servants when inflicted on a stranger or one not a recipient of the charity.
Hospital of St. Vincent v. Thompson, 116 Va. 101, 51 L.R.A. (N.S.) 1025, 81 S.E. 13; Basabo v. Salvation Army, 35 R.I. 22, 42 L.R.A. (N.S.) 1144, 85 A. 120; Bruce v. Central M.E. Church, 147 Mich. 230, 10 L.R.A. (N.S.) 74, 110 N.W. 951; Holdern v. Salvation Army, 199 N.Y. 233, 32 L.R.A. (N.S.) 62; Van Ingen v. Jewish Hospital, 164 N.Y.S. 832; Hewett v. Womans Aid Assn., 73 N.H. 556, 7 L.R.A. (N.S.) 496; Marble v. Nichols Senn. Hosp., 102 Neb. 343, 167 N.W. 208; Travett v. Prison Assn., 98 Va. 332, 50 L.R.A. 564; Tucker v. Mobile Inf. Assn., 191 Ala. 572, 68 So. 4; Mulliner v. Evangleischer Diakonnisservern, 144 Minn. 393, 175 N.W. 699; Kellogg v. Church Charity Foundation, 112 N.Y.S. 566; 13 R.C.L. 948; 7 Labatt, Master Servant, page 7683; Rosen v. Peter Brent Hospital, 235 Mass. 66, 14 A.L.R. 563; Alabama Baptist Hospital Case, 145 So. 443; Unser v. Baptist Rescue Mission, 157 So. 298.
In the case before the court, however, it will not be necessary to consider the different decisions in regard to the liability of a charitable corporation where one is injured on account of the negligence of a servant while engaged in the work of the charity for in the case before the court the Millsaps Building was operated by the college purely as a business enterprise and in no manner whatsoever connected with the work of the college, and the courts are practically unanimous in holding in such commercial enterprises the charity is liable for the negligent acts of its agents the same as any other corporation.
Holder v. Massachusetts Horticultural Society, 211 Mass. 370, 97 N.E. 630; Winnemore v. Philadelphia, 18 Pa. Sup. Ct. 625; McKay v. Morgan Memorial Coop. Industries Stores, Inc., 172 N.E. 68; Mount Hermon Boys School v. Gill, 145 Mass. 139, 13 N.E. 354; Hall v. College of Physicians Surgeons, 254 Mass. 95, 149 N.E. 675; Reavey v. Guild of St. Agnes, 187 N.E. 557; Stewart v. Cal. Medical M. B. Assn., 176 P. 46; Gamble v. Vanderbilt University, 200 S.W. 510; Foley v. Wesson Memorial Hospital, 141 N.E. 113; McLeod v. St. Thomas Hospital, 95 S.W.2d 917; Lincoln Memorial University v. Sutton, 43 S.W.2d 195; Beverly Hospital v. Early, 197 N.E. 641.
Even the two states, Massachusetts and Tennessee, which have carried the trust fund theory to its logical conclusion and hold that such funds may not be diverted on account of the negligence of either the servants or the managers of the charity either to patients, strangers or employees, have unhesitatingly held that such charities are liable for the negligent acts of their servants and employees when the charity is engaged in a business or commercial pursuit not connected with the work of the charity except as a means of providing funds for it, as will be seen from the cases of Gamble v. Vanderbilt University, 200 S.W. 510, and Holder v. Mass. Horticultural Society, 211 Mass. 370, and numerous Massachusetts cases to the same effect.
One of the main arguments used by charitable institutions in asking that they be not held to the general rule of law that the master is liable for the torts of his agents is that the charity does not benefit by the acts of its agents while engaged in the charitable work. That is, the work of the agent produces no money or gain for the charity and, therefore, the doctrine of respondeat superior does not apply. However, when the charity is engaged in an ordinary moneymaking enterprise this argument disappears and the doctrine of respondeat superior applies when the employee or agent is endeavoring to make money for the charity in a commercial pursuit the same as it would apply to any other corporation or individual.
It is true that the public has an interest in well conducted and well endowed institutions of learning and in having a part of the expense saved for those who are able to attend, but the public is also interested in seeing that a corporation that undertakes to perform a function be required to perform it with due care and the public is interested in seeing that no corporation is encouraged in negligently injuring or killing persons by granting it immunity for so doing. Especially is this true when they are engaged in an ordinary business. If a corporation can engage in the business of operating a large office building and have no sort of liability on account of damages inflicted by its own negligence or the negligence of its employees, then it could engage in the business of running a store, sawmill or any type of highly dangerous manufacturing, and maim, kill and injure its employees and customers without the liability that would affix to its commercial competitors who did not operate "in the name of charity."
Watkins Eager, of Jackson, for appellee.
The Ohio Supreme Court in the case of Taylor v. Flower Deaconess Home Hospital, 104 Ohio St. 61, 135 N.E. 287, 23 A.L.R. 900, 907, said: "As has been seen from the references to the decided cases the decisions of courts are irreconcilable either as to the conclusions arrived at or the reasons given by different states for the same conclusion. However, we are convinced that sound reasons sustain the great weight of authority to the effect that a public charity should not be held liable for the negligence of the servant in whose selection the hospital and its managers have exercised due care."
Weston v. Hospital of St. Vincent of Paul, 116 Va. 101, 81 S.E. 13, 23 A.L.R. 907.
This court has squarely announced the rule that a charitable institution is not liable for the negligence of its servants where due care has been exercised in the selection of such servants.
The subject matter under discussion has been exhaustively treated by the textbook writers, and at the outset we wish to give the court the benefit of all material on the question. In the first place, a full and complete annotation is found in A.L.R., as follows:
14 A.L.R. 572; 23 A.L.R. 923; 30 A.L.R. 455; 33 A.L.R. 1369; 42 A.L.R. 971; 62 A.L.R. 724; 86 A.L.R. 491.
The Mississippi cases are: Eastman Gardiner Co. v. Permenter, 111 Miss. 813, 72 So. 234; James v. Y. M.V.R.R. Co., 153 Miss. 776, 121 So. 819; Miss. Baptist Hospital v. Moore, 156 Miss. 676, 126 So. 465, 67 A.L.R. 1106; Pace, Minor, etc., v. Methodist Hospital, 130 So. 468.
Illinois, Georgia, Missouri, Kentucky, Kansas, Maine, Maryland, Oregon, South Carolina, Wisconsin and Arkansas adhere to the rule of total immunity irrespective of the character of the plaintiff.
Parks v. Northwestern University, 218 Ill. 381, 75 N.E. 991, 2 L.R.A. (N.S.) 566; Johnson v. City of Chicago, 258 Ill. 494, 101 N.E. 960; Tollefson v. City of Ottawa, 228 Ill. 134, 81 N.E. 823; Hogan v. Chicago Lying-in Hospital, 335 Ill. 42, 168 N.E. 461; Simon v. Pelouze, 263 Ill. App. 177; Jackson v. Atlanta Goodwill Industries, 46 Ga. App. 425, 167 S.E. 702; Plant System Relief Hospital Dept. v. Dickerson, 118 Ga. 647, 45 S.E. 483; Georgia Baptist Hospital v. Smith, 139 S.E. 101; Whitaker 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; Eads v. Y.W.C.A., 325 Mo. 577, 29 S.W.2d 701; Roberts v. Kirksville College of Osteopathy and Surgery, 16 S.W.2d 625; Hope v. Barnes Hospital, 227 Mo. App. 1055, 55 S.W.2d 319; Emery v. Jewish Hospital Assn., 193 Ky. 400, 236 S.W. 577; Pikeville Methodist Hospital v. Donahoo, 221 Ky. 538, 299 S.W. 159; Williams Adm'x v. Church Home for Females and Infirmary for Sick, 223 Ky. 355, 3 S.W.2d 753; Van Pelt v. City of Louisville, 77 S.W.2d 942; Bachman v. Young Women's Christian Assn., 179 Wis. 178, 191 N.W. 751, 30 A.L.R. 448; Jenson v. Maine Eye Ear Infirmary, 107 Me. 408, 78 A. 898; Perry v. House of Refuge, 63 Md. 20; Weddle v. School Comrs., 94 Md. 334, 51 A. 289; Martin v. Moore, 99 Md. 41, 57 A. 671; Loeffler v. Trustees of Sheppard and Enoch Pratt Hospital, 130 Md. 265, 100 A. 301; Hill v. President and Trustees of Tulatin Academy and Pacific University, 61 Or. 190; O'Neill v. Odd Fellows Home of Oregon, 174 P. 148, 89 Or. 382; Hamilton v. Cornwallis General Hospital Assn., 146 Or. 168, 30 P.2d 9; Vermillion v. Women's College, 104 S.C. 197, 88 S.E. 649; Webb v. Vought, 127 Kan. 799, 275 P. 170; Nicholson v. Hospital Assn., 97 Kan. 480, 155 P. 920; Davin v. Benevolent Assn., 103 Kan. 48, 172 P. 1002; Morrison v. Henke, 165 Wis. 166, 160 N.W. 173; Fordyce v. Woman's Christian National Library Assn., 79 Ark. 550, 96 S.W. 155, 7 L.R.A. (N.S.) 485; 11 C.J. 374, par. 106.
The Supreme Court of Ohio has classed the Massachusetts court as representing "the extreme view of absolute exemption from liability," citing in support the case of Roosen v. Peter Bent Brigham Hospital, 235 Mass. 66, 126 N.E. 392, 14 A.L.R. 563, and after quoting from the Roosen case the Ohio court says, "It will thus be seen that the Massachusetts Supreme Court has now adopted the principle of complete exemption from liability of such institutions."
Taylor v. Flower Deaconess Home and Hospital, 104 Ohio St. 61, 135 N.E. 287, 23 A.L.R. 900; McDonald v. Massachusetts General Hospital, 120 Mass. 432; Bachman case, 179 Wis. 178, 191 N.W. 751, 30 A.L.R. 448; Kidd v. Massachusetts Homeopathic Hospital, 237 Mass. 500, 130 N.E. 55; Glaser v. Congregation Kehillath Israel, 161 N.E. 619.
The Massachusetts court in the case of Zoulalian v. New England Sanatorium Benevolent Assn., 119 N.E. 686, said in part: "It never has been held in this commonwealth that a charitable institution was liable for negligence; on the other hand, it has been expressly held that such institutions are not liable for the negligence of their servants or agents. McDonald v. Mass. General Hospital, 120 Mass. 432, 21 Am. Rep. 529; Farrigan v. Pevear, supra, and cases cited."
Reavey v. Guild of St. Agnes, 187 N.E. 557.
Colorado seems to hold that a recovery will not be permitted where it appears that the judgment against the trust if satisfied would deplete the trust fund, and cites in support the Fordyce case from Arkansas, 7 L.R.A. (N.S.), 485.
In the case of Gable v. Sisters of St. Frances, 227 Pa. 254, 74 A. 1087, the Pennsylvania court states the principle in the following language: "It is a doctrine too well established to be shaken, and as unequivocally declared in our own state as in any other, that a public charity cannot be made liable for the tort of its servants. The doctrine rests fundamentally on the fact that such liability, if allowed, would lead inevitably to a diversion of the trust funds from the trust's purposes. Cook v. Norton Memorial Infirmary, L.R.A. 1918E 647; Perry v. House of Refuge, 52 Am. Rep. 495; Corbett v. St. Vincent's Industrial School, 68 N.E. 997."
Fire Ins. Patrol v. Boyd, 120 Pa. 624, 15 A. 553, 1 L.R.A. 417, 6 A.S.R. 745; Winnemore v. Philadelphia, 18 Pa. Sup. Ct. 545.
Michigan early adopted the rule of exemption as to beneficiaries, Downes v. Harper Hospital (1894), 101 Mich. 555, 60 N.W. 24; but in Bruce v. Central Methodist Episcopal Church (1907), 147 Mich. 236, 110 N.W. 951, and in Gallon v. House of Good Shepherd (1909), 158 Mich. 639, 122 N.W. 631, the plaintiff was a stranger to the charity and a recovery was permitted, the court stating that it would have no authority to make any exemption which could not be based upon implied contract or waiver. The two most recent cases reaffirming the doctrine of exemption as to beneficiaries are Bruce v. Henry Ford Hospital (1931), 254 Mich. 394, 236 N.W. 813, and Greatrex v. Evangelical Deaconess Hospital (1933), 261 Mich. 327, 246 N.W. 137.
The Nevada court rejects the trust fund doctrine, and that of negligent selection, resting its decision on the basis of waiver with respect to a beneficiary, wherefore a beneficiary may not recover but a stranger may.
California, Connecticut, New Jersey, Ohio, Texas and Virginia seem to permit a recovery in the case of a stranger.
Phoenix Assur. Co. of London v. Salvation Army, 83 Cal.App. 455, 256 P. 1106; Cohen v. General Hospital Society of Connecticut, 113 Conn. 188, 154 A. 435; Daniels v. Rahway Hospital, 160 A. 644 (N.J.); Sisters of Charity of Cincinnati v. Duvelius, 123 Ohio State 52, 173 N.E. 737; St. Paul Sanatorium v. Williamson, 164 S.W. 36; Hospital of St. Vincent of Paul in City of Norfolk v. Thompson, 116 Va. 101, 81 S.E. 13.
The rule in Wyoming seems to be limited to the exercise of due care in the selection of servants and employees, and the decided cases seem sufficiently broad to cover all situations and would thereby seem to place strangers and third parties in the same classification as beneficiaries.
Williams v. Union Pac. R.R. Co., 20 Wyo. 392, 124 P. 505; Bishop Randall Hospital v. Hartley, 24 Wyo. 408, 160 P. 385.
Tennessee recognizes the rule as to a beneficiary of a charity; Abston v. Waldon Academy, 118 Tenn. 24, 102 S.W. 351; but apparently permits a recovery where the injured party is a stranger; Gamble v. Vanderbilt University, 138 Tenn. 616, 200 S.W. 510; Love v. Nashville Agricultural Normal Institute, 146 Tenn. 550, 243 S.W. 304, but in the latest case of Wallwork v. City of Nashville, 147 Tenn. 681, 251 S.W. 775, announces the principle of the trust fund doctrine, and in the last cited case in part said: "It is now held on grounds of public policy that a private charitable hospital which has exercised ordinary care in the selection of its employees is not liable for injuries resulting from their negligence."
Both Nebraska and Louisiana recognize the rule insofar as a beneficiary is concerned, but permit a recovery as to third persons.
Silvia v. Paxton Memorial Hospital, 121 Neb. 860, 238 N.W. 751; Marble v. Nicholas Senn Hospital Assn. of Omaha, 102 Neb. 343, 167 N.W. 208; Wright v. Salvation Army, 125 Neb. 249, 249 N.W. 549; Unser v. Baptist Rescue Mission, 157 So. 298.
Minnesota and New Hampshire hold charitable institutions to the same liability as the ordinary business corporation or individual.
Since the decisions of these two states are in direct conflict with the pronouncements of this court they are immaterial on the question here presented. Likewise decisions of Rhode Island would have no influence upon this court because they repudiate the doctrine of exemption even as to any patient in a hospital.
Alabama may possibly belong in the classification with Minnesota and New Hampshire as permitting recovery on the same basis as would apply to any private corporation.
It would be impossible to intelligently discuss all of the cases decided in this country on this question within the bounds of a brief of reasonable length. There are literally dozens of cases more or less in point to which we have not made reference, but reference thereto would throw no additional light on the subject. It is certainly apparent from the numerous cases hereinbefore cited that various states have arrived at various and utterly inconsistent results. Most of the courts which refer to the waiver authority frankly concede the rule of exemption is more generally recognized.
We, therefore, respectfully submit that while there is a diversity of opinion among the various courts of the country, that this court has firmly announced the rule of exemption where due care has been exercised in the selection of the charity's servants, and that it would be consistent and logical with these previous decisions to apply the rule of exemption to the case at bar.
Argued orally by M.M. McGowan and J.H. Howie, for appellants, and by Pat Eager, for appellee.
Mrs. Myrtle Rhodes, G.C. Rhodes, adults, and their minor children, Mary, Robert, and Rudine, by their mother and next friend, brought suit against Millsaps College, appellee, for the death of Grover Evans Rhodes, the twelve year old son of G.C. Rhodes and Mrs. Myrtle Rhodes, said Grover Evans Rhodes having been killed on August 17, 1936, by the elevator in the Millsaps Building, owned by appellee.
The declaration alleges that Millsaps College is a corporation operating an institution of learning in Jackson, Miss., and owning certain real estate among which is the building on the corner of Capitol and Roach streets, which it rents to tenants for office space and business purposes, and, for the accommodation of its tenants, it operates therein an elevator by electrical power, which elevator is operated by employees of appellee; that in the operation it is caused to travel up and down on ropes and pulleys, and in its construction there are heavy weights so placed as to operate in reverse order to the elevator, and there are windows, for the purpose of giving light and air, opening out of the elevator shaft onto the roof of the adjoining one-story building, which also belongs to appellee. It was also alleged in the declaration that for a long time prior to August 17, 1936, appellee left open the window from the second-story building out onto the roof of the one-story building, and also the window from the elevator shaft onto the roof of said one-story building, and had knowingly permitted small children to crawl through the window from the stairway onto the roof of the adjoining one-story building and to play thereon. It was also alleged that it was the custom of the tenants of said two-story building to throw wrappings and tin foil from cigars and cigarettes and chewing gum out of the windows, and that children of tender years were known to be accustomed to crawl out on said roof to gather this up and that appellee negligently left open the window from the stairway to the roof of the adjoining one-story building, well knowing the habits and disposition of small children, and allowed them to look into the elevator shaft to watch the elevator go up and down. The declaration also alleged that this open window was, in effect, an invitation to all children, a challenge to their natural curiosity, and that it did actually attract Grover Evans Rhodes, deceased, who, on August 17, 1936, was playing in and about the building above mentioned, having crawled through the window on the stairway, and, while so engaged in play, said Grover Evans Rhodes suddenly put his head into the window opening at the time the heavy weight came down; his head was caught between the window sill and the heavy weight, and was, by the counter weight of the elevator, completely severed from his body. It was further alleged in the declaration that the death of Grover Evans Rhodes was due solely because of the fact that appellee maintained and operated an elevator with the window open at such a height as to become an attraction to small children, and judgment was demanded against appellee.
The appellee pleaded the general issue with notice thereunder setting up facts substantially the same as those in the special plea to be hereinafter noted. There was a motion to strike the notice under the general issue plea, but thereafter a special plea was filed; demurrer was filed thereto, which demurrer was overruled, and, plaintiffs declining to plead further, final judgment was rendered dismissing the suit.
The special plea alleged: (1) That plaintiffs ought not to recover because appellee is a charitable institution, having been created under an act of the Legislature approved February 21, 1890 (Laws 1890, c. 379), as shown by a copy thereof made an exhibit to the plea; (2) that appellee is not incorporated for profit, pays no dividends, has no capital stock, and that all its property was acquired by private donation and is held in trust for charitable purposes; (3) that it does not now, nor did it on August 17, 1936, operate for profit, but that all of its resources, including all donations, legacies, and receipts from students, or otherwise are devoted solely and exclusively to charitable and benevolent purposes; (4) that the building on the corner of Roach and Capitol streets, in Jackson, Miss., and the lot on which it is located, were donated to appellee by R.W. Millsaps, as a result of whose benevolence said appellee was instituted; that said building constitutes a part of the endowment of appellee; that all revenues therefrom are devoted solely and exclusively to appellee's charitable and benevolent purposes, and all revenues constitute a trust fund devoted to the charitable purposes of appellee, and cannot be diverted from the purpose to which the same has been dedicated; that appellee has, at all times, since its creation, been solely engaged in the operation of a college for the education of the youth, and, while it is denied that the injury and death resulted from any negligence on the part of the appellee, nevertheless, by reason of the foregoing facts, said appellee cannot be held to be liable to appellants in any manner whatsoever.
This special plea was demurred to: (1) Because it was alleged that it did not state a cause of defense; (2) that the building in question is owned by Millsaps College, and is operated as an office building for hire, and therefore said appellee would not be exempt from suit on tort; (3) that, the operation of the building being for hire, appellee would be liable in tort; (4) that no benevolent institution could be exempt from liabiltiy for tort when it occurred in the operation of a business separate and apart therefrom, for profit, even though the profit received is used exclusively for said benevolent institution; and (5) that there is no legal defense set up in said special plea.
The charter of appellee granted in 1890 provides that R.W. Millsaps and certain other persons were a body corporate and politic under the name of "Millsaps College," and thereby they and their successors could sue and be sued, contract and be contracted with, have common seal and break same at pleasure, and could accept donations of real and personal property for the benefit of the college, and do and perform all other acts for its benefit that were not repugnant to the Constitution and laws of the state or the United States; that said college could confer degrees and certificates, and should keep down the cost of education. It was also provided in said charter that said college could own grounds, not to exceed 100 acres, for its building and campus, and could accept donations or grants of land for the site of said institution, and should be exempt from all state, county, and municipal taxation so long as said college should be kept open and maintained for the purposes contemplated. And the said college was to be under the supervision of the conferences of the Methodist Church in Mississippi.
It will be seen from a careful reading of the special plea that appellee claims complete immunity from liability for negligence of its servants on the ground that it is a charitable institution. It is not alleged in this special plea how the servants placed in charge of the building were selected, nor their experience or qualification.
This court has not heretofore passed upon the question as to whether or not a charitable institution which conducts a business separate and apart from its charity, said business being a commercial venture, is liable for torts of agents in the operation of said separate business, where the funds derived from this business are applied to the charitable purposes of the institution. We have decided that as to the operation of its charity, as such, there is no liability, where it has exercised care and caution in the selection of its servants, for an injury. See Mississippi Baptist Hospital v. Moore, 156 Miss. 676, 126 So. 465, 468, 67 A.L.R. 1116; James v. Yazoo M.V.R. Co., 153 Miss. 776, 121 So. 819; Eastman Gardiner Co. v. Permenter, 111 Miss. 813, 72 So. 234. In Mississippi Baptist Hospital v. Moore, supra, it was said that, "In such cases the patient's right of action is against the physician personally who treats him, and consequently negligence resulting in the injury is against the servant personally who inflicts the injury or is negligent in performing the duties assigned to him. All that the hospital is required to do in such case is to exercise due care and caution in selecting the physician or servant; if it is negligent in these respects, then it is liable to the patient, and consequently the liability under the indemnity policy is for this negligence; that is to say, negligence in the selection of suitable servants and physicians and proper facilities ordinarily used in a hospital."
Our court has never been committed to the doctrine that a charitable institution has full immunity from suit, and that trust funds may not be diverted from that use. In these cases it is recognized there is liability where there is negligence in selecting its agents. While we have no case directly in point to the effect that where a charitable institution engages in a commercial venture, apart from its charity, it is subject to liability as other persons or corporations for injuries, yet in other cases from this court we think the reasoning is analogous, and that the principles of liability there should be announced in the case at bar. In Meridian Sanatorium v. Scruggs, 121 Miss. 330, 83 So. 532, a patient was injured by the negligence of a nurse, and it was held that the hospital was liable since it was being operated for profit. In Enochs v. City of Jackson, 144 Miss. 360, 109 So. 864, a statute granting exemption to certain property was under consideration. There the church had a lot adjoining that on which the church was situated, which was not used except that a plank walk was maintained thereon for entrance to the church annex. It was there held that this lot was not exempt from taxation. In Gunter v. City of Jackson, 130 Miss. 686, 94 So. 842, 27 A.L.R. 1043, it was held that property owned by a religious institution which it is not entitled to own is subject to taxation as other property of like character owned by individuals. In Central Methodist Church v. Meridian, 126 Miss. 780, 89 So. 650, it was held that property owned by a religious society which it was not authorized to hold was subject to taxation. In Millsaps College v. Jackson, 136 Miss. 795, 101 So. 574, it was held that the building involved in the case at bar was not exempt from taxation under the charter of said college. In the case of Yazoo City v. Birchett, 89 Miss. 700, 42 So. 569, it was held that a municipality which embarks in private business, as distinguished from governmental, for profit, has its liability determined by the rules applicable to private operations. There a telephone lineman climbing a pole of his company was injured by coming in contact with a guy wire of the electric plant owned by the city. The court, speaking through Judge Calhoun, said that, "When a city embarks in the management of any utility for profit, it is liable, or not liable, by precisely the same rules applicable to private corporations or individuals conducting such enterprises. The fact that the city was the owner probably explains the serious tone of the defense. Many times the importance of a party makes the gravity of the case." The reasoning in this case is analogous to the case at bar. A building not used in its collegiate work is not exempt from liability for torts of its agents in such operation. In the case of Johnson, City Tax Collector, v. Mississippi Baptist Hospital, 140 Miss. 485, 106 So. 1, it was held that where a hospital maintains a home for nurses employed in the hospital, where they live when not on duty, such building is not exempt from taxation within the meaning of section 4251, Code 1906. In the case of West Monroe Mfg. Co. v. Town of West Monroe, 146 La. 641, 83 So. 881, the Supreme Court of Louisiana held that, while a municipality is not liable for damages occasioned in a governmental or public function, it stands on the same footing as an individual in the case of private functions.
There is considerable confusion in the different states as to the basis of liability or immunity therefrom, but it seems to us that where a charitable corporation enters into business apart from its charity, although with the purpose of securing revenue to be used in its charity, it is liable in tort to the same extent as a private corporation.
In the case of Holder v. Massachusetts Horticultural Society, 211 Mass. 370, 97 N.E. 630, the Supreme Court of that state held that in an action against the owner of a building operated for profit, in which the plaintiff was injured by the fall of an elevator on which the plaintiff had stepped by the direction of a superintendent, when plaintiff and the superintendent were engaged in adjusting the lifting cable of the elevator which had fallen, and plaintiff was relying upon the assurances of the superintendent that it was safe, and the elevator dropped to the bottom of the well, there was liability against the defendant.
In McKay v. Morgan Memorial Cooperative Industries Stores, Inc., 272 Mass. 121, 172 N.E. 68, it was held that charitable corporations are not free from liability for negligence in carrying on business for profit.
In Gamble v. Vanderbilt University, 138 Tenn. 616, 200 S.W. 510, L.R.A. 1916C, 875, it was held that to the extent of income derived from an office building operated largely for profit, and separate from its educational plant, though occupied, in part, by its law school and library, Vanderbilt University was liable to a tenant's representatives for his death in an elevator due to negligence, although the university was a charity, and the general rule is that charitable trust funds are not to be depleted by subjection to liability for negligence. There is valuable discussion in this case, but we will not quote therefrom in order to not unduly lengthen this opinion. The majority of the courts of the country hold that a person injured by the negligence of some industry not connected with a charity may recover for such injury.
We are thoroughly of the opinion that where a charitable institution, or corporation, goes into an independent business, apart from its charity not to be operated for any of its charitable purposes, but to be operated solely for profit, or to secure funds for its charitable purposes, it is liable for injuries as other corporations. It will be noted from the charter of appellee in the case at bar that no specific power is given thereby to operate a building which was donated to it subsequent to the granting of the charter. It could, of course, sell the building and apply the proceeds to its charity; it could lease the building to be operated by the lessee, or, by the grace of the sovereign, it could operate the building itself, but its charter, per se, did not give it the power to operate a business disconnected with its charity, consequently it is subject to the general law as to such operation.
We decide this question solely on the sufficiency of the special plea, but we do not decide whether the appellee was liable for the death involved, as we do not know what the facts would be when finally developed.
It follows that the judgment of the court below must be reversed, and the demurrer to the special plea sustained.
Reversed and remanded.