President of Maryland Hospital v. Foreman

Bartol, C. J., delivered the opinion of the court. This suit was instituted by the appellee to recover money paid by him upon a contract alleged to be illegal and void. At the first argument, heard near the close of the last term, the validity of the contract, evidenced by the receipt dated the 17th of April, 1863, was assailed chiefly on the ground that it was condemned by public policy, and was, therefore, illegal and void. The contract having been executed, and there being no evidence whatever of any duress, hardship or oppression practiced upon the party complaining, there seemed to be great force in the objection that the plaintiff came too late to have the contract set aside, and that the principle, in pari delicto, ought to be applied.

The judges who heard the argument not being entirely agreed, and the questions, as here presented, being somewhat novel, it was considered most consonant with the ends of justice to direct *a re-argument, to allow time for a fuller examination, and afford an opportunity for consulting the other members of the bench who did not sit at the oral argument. We must express to the counsel on both sides our thanks for the very full and satisfactory manner in which they have discussed the questions in their notes of argument. ⁵³⁰ These have been carefully considered, and we now proceed to state the grounds upon which we have come to the conclusion that the judgment of the Superior Court ought to be affirmed. The contract upon which the money was paid by the appellee having been made by a corporation, the question lying at the basis of the whole case is, whether the corporation possessed •the power to make, such a contract. This depends upon the true construction of Art. 44. of the Code by which its powers are conferred and defined.

The only sections bearing upon the question before us are the 7th and 9th. Sec. 7 provides that the President and Visitors “ may make, ordain, alter, amend and abolish all by-laws, rules and regulations for the administration •and government of the hospital as they may deem beneficial and advantageous.” Sec. 9 provides that “ they, or any number of them, not less than seven, shall have power to prescribe such rules and regulations as they may deem necessary for the management, government and regulation of said hospital, and for the admission and discharge of persons therein or therefrom, which rules and regulations shall be binding on all persons whatsoever.” In our opinion, these sections cannot be properly construed to confer on the appellants the power to make the contract in question. They obviously refer first to the internal police and management of the hospital, and confer power to make rules for its regulation and government; and, secondly, to make rules for the reception and discharge of patients, and as incidental thereto, the power to fix the terms or rate of compensation to be paid for the nursing, attendance and care of patients. The contract before us was not made under, or in conformity with, any such rule or regulation. *It was in the nature of a life insurance, or a lottery, or wager contract, depending upon the duration of the life of the patient, without regard to the duration of her unfortunate malady, and made the loss or profit of the appellants depend upon the life or death of the patient.

The power to prescribe rules fixing the rate of compensation for the nare of insane patients, cannot, we think, be construed into a power to make a speculative contract of that kind. No principle is better established than that which limits corporations to the exercise of such powers only as are expressly granted by law, and such as are necessary and usual in the ⁵³¹ course of their business, to enable them to attain the purposes of their creation. No express power to make the contract before us was conferred upon the appellants, nor was it either usual or necessary in the course of their business. The proof shows that it was unusual; no such contract had ever before been made by them, and, in order to fix upon its terms, they found it necessary to resort to the tables of life insurance companies, compiled from calculations of the probable duration of human life.

The power to enter into contracts of that nature cannot be inferred from the terms of the charter. The President and Visitors of the Maryland Hospital are a corporation established for the purpose of receiving insane patients, an unfortunate class of persons most helpless and dependent upon the care and protection of those who have them in charge. The object of the law in