Loeffler v. Trustees of the Sheppard & Enoch Pratt Hospital

Thomas, J., delivered 1he opinion of the Court. This suit was brought by the appellant against the. Trustees of the Sheppard and Enoch Pratt Hospital, a body corporate, to recover for injuries alleged to have been caused by the negligence of the defendant. ²⁶⁶ Tbe narr. alleges that the defendant was the owner of the premises known as 121 West Baltimore street, and that the plaintiff was “employed in the fire department of Baltimore City”; that on the 14th of December, 1912, the plaintiff with other members-of his company was ordered to the defendant’s premises for the purpose of putting out a fire in the rear of its building; that after the fire had been gotten under control, be was ordered to- lower the fire escape, and that in order to do so he stepped on the fire escape and while going up. the same to lower the ladder, the ladder, because of its defective condition, which was known or should have been known to tbe defendant, slipped and broke his arm in several places. The defendant filed the general issue plea and two additional pleas.

The second plea avers that the defendant was incorporated by tbe Act of 1853, Chapter 2'74, at the instance of the late Moses Shep-pard of Baltimore City, who by bis. last 'will and testament bequeathed and devised to the defendant “large and valuable property” for tbe purpose of founding and maintaining an asylum or hospital in which the insane poor, and those suffering from mental and nervous diseases, could be treated, and that the late Enoch Pratt of Baltimore City, died in 1896, leaving a will by which he gave-the residue of his estate to the defendant with directions that the income therefrom should be used in the first instance to. complete the defendant’s buildings and for the erection of siich other buildings as would accommodate not less than two hundred additional inmates, and that thereafter the income-should be devoted to tbe cure of tbe indigent insane. The plea then alleges: “That ever since the said asylum or hospital has been- so put in operation, in December, 1891, it has been conducted under tbe said charter as ail asylum or hospital, in which the indigent insane, and those suffering" from mental and nervous, diseases are received and treated, and while so conducting the said asylum or hospital, the defendant- has made provision for the' reception and treatment of a ²⁶⁷ limited number of patients who are able to make compensation for tbe room and attention they require; that all of tbe money needed to pay the expenses of the management and operation of the said asylum or hospital is supplied by the income derived from the investments of the money and the property devised and bequeathed to it by the last will of Moses Sheppard, and by the last will and testament of the late Enoch Pratt, and from several small donations and bequests from other persons, and by the money received from the limited number of patients who' are able to make compensation for the room and attention they may require, all of which funds form the common fund out of which the expenses of the management and operation of the said asylum or hospital are paid; the said defendant corporation has not at any time ever had any stockholders and that none of the Trustees of the said corporation receive any compensation of any kind for themselves as. such trustees, and all of the funds and revenues derived by the said corporation from tbe investments of its property, and from such patients as pay for room and attention afforded them in the said asylum or hospital, are applied and apportioned either to the payment of the salaries, of the physicians, surgeons, servants and agents necessary and required for the proper1 operation and management of the said asylum or hospital, or to the payment of the other expenses necessarily involved in the management, operation and development of the said asylum or hospital, so as to enable the said defendant to provide in the said asylum or hospital for the reception and treatment without charge of indigent insane and indigent persons suffering from nervous and mental diseases, without regard to age or sex, and that all of the funds are held in trust solely for the charitable purposes above set forth. That the premises described in the declaration as 121 West Baltimore street constitute a part of the trust estate held by the defendant for the said charitable purposes as above set forth, and that the fire escape mentioned in the declaration was erected and constructed by ²⁶⁸ an experienced, skillful and competent contractor, and the work was done by experienced and competent mechanics.” The third plea, which alleges that the “defendant is a corporation, duly incorporated under the laws of the State of Maryland, for the charitable purpose of organizing and conducting an asylum or hospital in which the indigent insane, and those suffering from nervous and mental diseases, may be treated,” contains substantially the same averments in regard to the sources of the defendant’s income^ the application thereof, its title to the property 121 West Baltimore street and the construction of the fire escape. The plaintiff demurred to the second and third pleas, but the Court overruled the demurrer, and the plaintiff having declined to reply to these pleas, judgment was entered for the defendant.

From that judgment the plaintiff has appealed. The defense relied on in this case is one that has given rise to much discussion and a great diversity of judicial opinion, not only as to the proper rule in such cases, but also as to the principle upon which it should be based. In the case of Tucker v. Mobile Infirmary Asso., L. R. A. 1915 D, 1167, decided in 1915, the Supreme Court of Alabama, dealing with the question as an open one in that State, says: “While it must be conceded that the great weight of authority in this country is in favor of exemption to an institution engaged in charitable work from liability for the torts of its servants or agents, yet there is some contrariety of opinion as to the principles Upon which this result is rested, and varied reasons are given not at all consistent one with the other. For the purposes of this case these authorities-may be grouped into three classes.

One line of decisions would rest exemption from liability upon what might be termed ‘the trust fund theory,’ that is, that all funds- of such institutions are held in trust for the particular charitable purpose, and that it is a breach of trust to apply them to any other purpose, and that the payment of damages due to the ²⁶⁹ negligence, of tbe servants of tbe institution is. not a purpose contemplated by the trust, and that therefore their funds cannot be diverted to the payment thereof. Other authorities rest their conclusion, it seems, upon the theory that the rule of respondeat superior does not apply to- such institutions, for the reason that the servants in the exercise of their duties are not engaged in the work which is for the benefit or profit of the master, and that such is essential to call for the application of this rule. Still other authorities base their conclusion upon what might be termed an 'implied assent theory’; that is, that one who accepts, the benefit of charity must be taken impliedly to have assumed the risk of negligent injuries caused to him by servants who have been properly employed or retained in his service, or to have waived liability of a charitable institution for injuries so received.” In that case, the Court, after a.n extended discussion of the cases supporting the several theories mentioned, rejected the doctrine of absolute exemption upon the “trust fund theory,” and the theory that the rule of respondeat superior does not apply to such institutions, and while crediting the theory of “implied assent” with the weight of what it termed the more recent and best, considered cases, held that a paying patient in a hospital, “conducted without stock or profit, in which indigent patients are treated without cost,” could recover damages for injuries inflicted through the negligence of an attending nurse. In the case of Downs v. Harper Hospital, 101 Mich. 555 , 25 L. R. A. 602, where it was held that there could be no recovery against an eleemosynary institution for an injury to an inmate caused by the negligent or tortuous acts of its managers or employees, the Supreme Court of Michigan said: “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 ²⁷⁰ ■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 can not 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 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