Court Opinion

ID: 6545970
Source: CourtListenerOpinion
Date Created: 2022-07-19 22:19:35.176351+00
Date Added: 2024-06-11T15:55:58.071685
License: Public Domain

ON REHEARING. Hill, C. J. On the rehearing the court has made an exhaustive investigation of the authorities touching the liability of charitable corporations to judgment and subjection of their property to execution for the torts of their officers or employees. The weight of English and American authority is that' charitable corporations are not liable for the negligence of their officers, agents and employees. McDonald v. Hospital, 120 Mass. 432; Benton v. Hospital, 140 Mass. 13; Union Pacific Ry. v. Artist, 60 Fed. Rep. 365; Downes v. Harper Hospital, 101. Mich. 556; Williams v. Industrial School (Ky.), 23 L. R. A. 200, and exhaustive note reviewing authorities; Perry v. House of Refuge, (Md.), 52 Am. Rep. 495; Hearns v. Waterbury Hospital (Conn.), 31 L. R. A. 224; Van Tassell v. Hospital, 15 N. Y. Sup. 620; Collins v. Hospital, 69 N. Y. Sup. 106; Fire Ins. Patrol v. Boyd, 120 Pa. St. 624; Murtaugh v. St. Louis, 44 Mo. 479; Duncan v. Freidlater, 6 Clark & F. 894; Halliday v. St. Leonard’s Vestry, 11 C. B. N. S. 192; Herriott's Hospital v. Ross, 12 Clark & F. 507. The cases supporting the liability to suit and judgment are collated and discussed by the Rhode Island, court in Glavin v. Rhode Island, 12 R. I. 411, s. c. 34 Am. Rep. 675. Another line of cases is found in Powers v. Massachusetts Homeopathic Hospital, 109 Fed. Rep. 294, affirming the same case in 101 Fed. Rep. 896. Judge Lowell, speaking for the Federal Court of Appeals of the first circuit, drew a distinction in classes of negligence, in some holding the charitable corporations were liable, for instance, in negligently .selecting its officers or agents, or negligently overflowing neighboring 'land, while in others they were not liable. The case at bar comes in different aspect from any of the cases examined. Here the question of liability to judgment has been determined by the rendition of judgment, and the judgment is not here for review. Therefore the best light to be thrown on this case is from those jurisdictions where such judgments are properly obtainable, in order to ascertain what may be subjected to its satisfaction; in the other jurisdictions the question cannot arise. Judge Lowell, in the Powers case, supra, said: “There is no less impropriety in diverting funds impressed with a trust for the benefit of individuals than in diverting those impressed with a trust for a public charity. Yet the effectual though indirect liability of a private trust fund for the torts of those concerned in its management is undoubtedly recognized. It is true that a suit can not be maintained against a trustee, as such, for torts committed in the management of the trust property. The suit is brought against the trustee as an individual. The judgment and execution were against him individually.When these are satisfied, however, the trustee is reimbursed from the trust estate, unless individually at fault. (Citing authorities.) The trust fund is protected from immediate levy to satisfy the execution, not because of its complete immunity, but rather from technical reasons connected with the legal estate of the trustee in the property. Its technical immunity affords it no ultimate protection. * * * The merely technical immunity of a private trust fund from execution upon a judgment recovered in an action of tort affords no real reason for the real immunity of the funds of a charitable corporation where the technical considerations do not apply. That the funds of a public charity may be diverted to pay for some torts committed in the administration of the fund has often been decided.” He further limits the charge against a trust fund to a fund unconnected with the trust property. 'The Rhode Island court in the Glavin case, supra, said: “We also understand that the doctrine is that the corporate funds can be applied, notwithstanding the trusts for which they are held, because the liability is incurred in carrying out the trusts, and is incident to them. We do not understand, however, that the corporate property is all equally applicable. For instance, in the case of Mersey Docks v. Gibbs, (11 H. of L. 686), it was not decided that the docks themselves could be resorted to, but only the unapplied funds which the board then had or .might after-wards acquire. So in the case at bar it may be that some of the corporate property, the buildings and grounds for example, is subject to so strict a dedication that it can not be diverted to payment of damages.” Thus it is seen that, owing to its strict dedication to the trust, the domicil of the charity is not subject to process, or, as Judge Lowell puts it, there is a technical immunity of the trust property itself from execution. This immunity of trust property from execution was the controlling thought in the original opinion in this case, and is supported by these authorities, additional to those there referred to. 1 Black on Judgments, 420, 421; 2 Freeman on Judgments, 357, 368; 17 Am. & Eng. Enc. Law (2 Ed.), p. 778; 2 Freeman on Executions, § 172. Therefore, it follows that this immunity of the property strictly dedicated to the charity is an insurmountable obstacle to execution, even in those jurisdictions where judgments for torts are permitted, and where satisfaction may be had for them out of funds belonging to the charity. The reason given in some of the cases denying liability to suit is that, should judgment be rendered, the property would not be subject to it, and therefore it is unavailing to permit judgment. It has been insisted that the judgment concludes this question; but, as shown, the judgment only concludes a liability to be worked out of assets not immune from execution, in the jurisdictions where the corporations are subject to judgment. 'From the very nature of the issues involved in the suit for the damages there could be no issue as to what property should be subject to a possible judgment therein sought to be recovered. The Supreme Court of the United States said: “The general principle announced in numerous cases is that a right, question or fact distinctly put in issue and directly determined by a court of competent jurisdiction, as a ground of recovery, can not be disputed in a subsequent suit between the same parties or their privies; and; even if the second suit is for a different cause of action, the right, question, or fact once so determined must, as between the same parties or their privies, be taken as conclusively established, so long as the judgment in the first suit remains unmodified.”' So. Pac. Rd. v. U. S., 168 U. S. 1. This is considered the first rule on this subject, and the second is thus stated: “A judgment rendered by a court of competent jurisdiction on its merits is a bar to any future suit, between the same parties or their privies, upon the same cause of action, so long as it remains unreversed.” 2 Black on Judgments, § 504. In the suit terminating in judgment here there could not possibly have been “distinctly put in issue” the subjection of this property to an execution on the judgment then sought to be recovered; and there could by no possibility have been a trial therein on the merits as to the liability of this property to the judgment then sought to be obtained. A judgment does not operate upon property which is by law exempt from seizure and sale, i- Black, Judgments, § 424; 2 Freeman, Judgments, § 355; Cole v. Green, 21 Ill. 104; Green v. Marks, 25 Ill. 221; City of Davenport v. Peoria Ins. Co., 27 Ia. 277. It is also well settled that when-the property is not subject to execution, the execution sale passes no title. Smith v. McCann, 65 U. S. 398; Brooker v. Carlile, 77 Ky. 154; Earle v. Washburn, 89 Mass. 95; Hancock v. Brinker, 6 Ky. 247; 2 Freeman, Executions, §§ 172, 173. In Washburn v. Earle, supra, the case arose, as this one, after a judgment in it against a church society, as to whether an execution sale had passed the property to the purchaser, and it was held that the property was not subject to the claim of the judgment creditors, that there could be as to them no fraudulent conveyance of it, and that the execution sale had passed no title. This case is similar to Grissom v. Hill, 17 Ark. 483, where the contest arose after judgment, and it was held, owing to the trust -created under which the church property was held, that no title ■passed by execution sale. There was another question in that case as to the restraint on the alienation of the property, and the 'decision rested on both grounds, and each of those were asserted successfully against the judgment creditor, who was asserting •title acquired by execution sale of the church property. From these authorities it is clear that the judgment has not ■concluded any question as to what property is subject to it. Finding the property in controversy dedicated to the purpose of the charity, according to the allegations of the complaint, its intended domicil in fact, it is considered that an execution on the judgment in question passed no title to the purchaser. The motion is denied. Mr. Justice Battub concurs in this opinion; Mr. Justice Rid-•dick concurs in the judgment. Mr. Justice MgCuuuoch dissents, and Mr. Justice Wood is ■disqualified, and did not participate.