*1
836
cases,
Cir.,
A
immediate families.
certificate
their 7 all Lazarus, except upon par- follow- incorporation issued in the the the facts partners therein, direc- January, becoming ticularly disre- ing tors. The the stated the courts garded conveyance building corporate was transferred the form corporation, partners received stock to trusts and held the individual liable the 1935, proportion necessary In in Harry interests. the tax. It is set forth their Aberman, president, received S. as cases. It is facts these sufficient $3,750. salary supported returns for say they substantially tax Income corporation either were filed conclusion. president or one of other directors. case, held supra, the Court In the Clifford account, and corporation had its bank own gran- that the of whether determination partner- bought electricity it ship, also corporation re- conveyance tor retailed tenants purpose of taxa- mains the owner for the leases with building. It entered into also decided question fact to be tion tenants, foreclosure these and after such Appeals, and that the Board Tax 1933, mortgage it issued building upon terms depend determination must $292,000. bonds in the amount of new upon all conveyance circum- oper- creation and its stances attendant on capital filed returns were Federal stock & Helvering v. Lazarus ation. See also Co., supra. corporation years ended 30, Board found 1936 and 1937. The June that the Corporation facts Building Sheldon cited none of the cases ownership entity. corporate persuasive taxable so and stated in the Clifford as to bar, as operation the case at inas petitioner It is contended of case, say we cannot partnership, rather members re- committed Board in this case corporation assessed should be than the findings. in its versible error involved, during here because tax Board is affirmed. The decision of the equi years had the 1936 and 1937 over, to, and command table title actual think it property involved. We here individual members clear that neither th'e partnership, partnership it nor the such, self, whatever had command pow respect property with over this are corporation. We fur granted ers equitable they held no convinced that ther any way which could in mili title thereto UNIVERSITY BRIGHAM YOUNG v. powers operation against the tate LILLYWHITE. corporation. granted to the this be not If No. true, agreement primary purpose Appeals, Harry S. to deter creditors of Aber Circuit Court Tenth Circuit. man would be no avail. It be con 17, 1941. Jan. corporation respects ceded that in certain Rehearing April 14, 1941. fiction, Denied certainly not be equitable corporation to treat as a fact against against the creditors a fiction the Government. contention, petitioner support To re cases: following v. lies Corliss 336, Bowers, 376, 50 L. U.S. S.Ct. 916; Helvering, Gregory v. 293 U.S. Ed. 465, 266, 596, L.Ed. 55 S.Ct. 97 A.L.R. Co., 1355; Helvering Lazarus & v. U. 226; 209, 252, 60 84 L.Ed. Grif S.Ct. S. Commissioner, Helvering, 308 U.S. v. fiths 277, 319; 355, 84 L.Ed. Higgins 60 S.Ct. Smith, 308 U.S. 60 S.Ct. 84 L. v. Ed. Clifford, 406; Helvering v. U.S. 788; City 84 L.Ed. 60 S.Ct. States, Bank & Trust Co. United National
8.37
highly
cals
in Exercise No. 11 were
used
Third,
dangerous.
deféndant’s
structor failed to warn
dan-
performance
ger
experiment.
*3
Fourth,
supply
that defendant failed to
proper supervision,
and that
defendant
operation
was
in
conduct and
laboratory
in
which
performed,
permitted the in-
was
that
chemistry
charge
labora-
structors
of
plain-
tory
laboratory while
to leave said
experi-
engaged
performing
tiff
ment.
any way neg-
Defendant
was in
denied it
supervision
ligent in
of
experiment; specifically
that
alleging
Chemistry
plaintiff
Manual used
any,
adequately
dangers,
warned of the
if
experi-
performance
incident to
affirmatively
alleged
ment
that
and
contributory
guilty'
negli-
of
gence
proximately
which
contributed
PHILLIPS,
dissenting on
Judge,
Circuit
injuries
plaintiff understood the
and
petition
rehearing.
dangers incident
work
nature of the
and
thereto and assumed the risk.
As
a further defense
defendant
corporation, organized
pleaded that it was a
purpose
conducting
existing
of
for the
and
public
learning without
institution of
profit
corporation;
said
benefit to the
supported
maintained
that it
the
Day
of
of Latter
Church
Christ
Jesus
purpose
providing
for the
Saints
sole
learning
public
its mem-
instruction and
public
large,
and to the
at
at
cost
bers
and
City,
Judd, of
Lake
Utah
Salt
L.
Robert
expense
greatly in
excess
H.
Quinney,
Ray,
and A.
(Paul
S.
H.
J.
paid by
attending
fees
those
said
tuition or
Utah,
City,
Nebeker,
of Salt Lake
all
particularly
institution and
brief),
appellant.
liability
it is
for its
therefore immune
Stewart,
City,
Ralph
Salt Lake
T.
torts.
City,
Cannon, of Salt Lake
(Edwin B.
Utah
plaintiff,
evidence reveals
brief),
appellee.
Utah,
on the
freshman, enrolled
class
in a
known as
as
HUXMAN,
PHILLIPS,
Before
Chemistry II,
instructions of
MURRAH,
Judges.
Circuit
completed
had
She
a course
Johansen.
Chemistry I,
primarily
devoted
lectures
MURRAH,
Judge.
Circuit
elementary
chemistry
principles
on the
appeal
judgment
from a
This
study Chemistry
and had commenced
appellee, against
now
plaintiff,
favor
April 6,
company
That on
with
II.
defendant, Brigham Young University, now
plaintiff went to the
two classmates
labora-
injuries
appellant,
personal
re-
permission
tory
the instructor
explosion in a chemical labora-
sult of an
performance
entered
ex-
tory experiment,
appellee was a
while the
day’s study.
outlined for the
ercises
study
duly
regularly
student
said
enrolled
10 and
included Exercises
University.
experiments required
first
were the
be
First,
charges:
study,
pre-
she
in this
performed
course of
chemistry
experiments
inexperienced
having
and chemi-
ceding
course
required
assemblage
appara-
and of the materials
been devoted to the
cal reactions
performing
performance
known
tus to
used
Second,
experiments prescribed by
the chemi-
No. 11.
the course.
Exercise
directions
out
right,
set
follow
just
text
it is
like we
The manual used as the
applied
apparatus
the book.” The burner
fully
the materials
explosion re-
steps to
the mixed chemicals and the
experiment and
used in each
to be
followed;
results
purpose
sulted.
10No.
Exercise
attained. The
ex-
definitely established
It is
Oxygen,
preparation of
was to teach
application
plosion
from the
resulted
the use
among
things involved
phos-
red
mixture of
the burner to
oxides,
potassium chlorate
metallic
mangenese
ferric
phorous, potassium chlorate
con-
Exercise No.
dioxide.
ex-
apparent therefore
It is
oxide.
*
“* *
(cid:127)
warning:
following
tained the
by the misuse
plosion was occasioned
unless
anything
mix
Never
with a
with the
phosphorous
in connection
you
so.”
are instructed
do
There
*4
experiment.
performance of the
obtained
chemicals
no
that
evidence
performed
No. 10 was
Exercise
it
and
mislabeled
were
from the storeroom
instructor, Dr.
supervision
Exercise No.
that
must
conceded
Johansen.
potassium
mixture
warned of
object
11 was
of Exercise No.
that
phosphorous and
with
oxygen
properties
of the
teach some
contain-
instructions
read the
students
its
they
the science of
after
had learned
per-
proceeding to
ing
warning before
this
neces-
No. 10 and
preparation in Exercise
other
were no
experiment. There
form the
others,
use,
mangenese
among
sitated the
performance of
engaged in the
students
chlorate, used in
potassium
and
dioxide
Exercise No.
except
three
10 and
Exercises
re-
addition thereto
and in
an
explosion,
there was
in the
but
volved
phosphorous.
quired the use of red
part
chemistry at another
class in
advance
performance
beginning
At the
laboratory;
instructor was
no other
of
present
Dr.
left
Exercise No.
exercising any su-
in
room or
appointment
an-
laboratory
to meet an
class,
pervision
or classes.
over the
There is
student across the hall.
objections of the de-
the strenuous
Over
concerning
evidence
some conflict
fendant,
testimony of
plaintiff offered the
instructed
the students were
whether or not
Chemistry
Howell,
an instructor
witness
proceed
experiment in accord-
with the
City and
high school in Salt Lake
wit-
at a
with the directions
instructions
ance
in
and
University
Quinn,
instructor at the
ness
an
manual,
they
were
set
or whether
They
Utah.
as to the method
testified
up
apparatus,
and
secure the chemicals
employed
conducting
their
and manner
chemistry
equipment
used in the
to be
respective
at
institu-
classes
to await Dr.
return.
Johansen’s
experi-
especially
regard
tions
testified that he instructed
Dr. Johansen
supervision given the
ment No. 11 and the
exercises,
to read the
secure
students
performance.
its
connection with
students
equipment;
up the
the chemicals and
set
Witness, Howell, testified: “during the
apparatus and await his return to
laboratory period I never leave.” He fur-
laboratory.
that
his classes
ther testified
students
and another student testi-
pairs
given
and each one
worked
they
fied that
did not recall
assignment and that three students
definite
Johan-
they
them
sen so instructed
understood
permitted
together.
to work
seldom were
they
proceed
experi-
were to
practically
that
ment in
with the
He
that he used
further stated
instructions of
chemistry
accordance with the
the same
manual and when the
up
the manual.
apparatus was set
he insisted on them
set-up “okayed”
they ap-
having the
before
The evidence for the
does show
plied
the heat and that
was done
students, including plaintiff, did
any danger
eliminate
of accident.
exercise as
in the
read the
contained
storeroom,
manual,
Quinn,
chemistry
went to
secured the Witness,
instructor in
equipment required,
up
Utah,
set
objection
chemicals
over
chemicals,
apparatus,
mixed the
defendant,
permitted
explain
supposedly in
with the
accordance
instruc-
manner
what
what
and under
circumstances
in the
performed
tions contained
manual. There was
would have
Exercise
he
No. 11.
question among
three performing
some
testified
in his classes the
He
experiment concerning
individually
whether or not
permitted
worked
they
proceed.
hesitancy
After
pairs.
should
some
“I
to work
He further testified
girls
stated: “Well must be all
experi-
one
have to leave the room while
competency
light
judged
the instructors never
going
ment
re-
Meaning that his three assistants
thereof.
do.”
mained in
circulated
It must be conceded that evidence
questions
students, answering
among the
others,
of the conduct of
under the same
finished
them
had
watching
and
the
until
circumstances,
or
incompetent
similar
experiment.
further
testified
He
to establish a standard of care because
explosion
always explained
he
standard of care is fixed
sub
rule of
phos-
the mixture of
result from
stantive law of which the court is the sole
sulphur
phorus
chlorate,
Therefore,
judge.
comparative
con
potassium chlorate,
carbon and
permitted
duct
others
should not be
Quinn
testi-
further
chlorate.
infringe upon the
law. The
substantive
quite
to ob-
fied: “It would
difficult
by ordinary
standard of care is measured
using
they were
serve
to whether or not
as
Therefore,
ordinary
care
lack
care.
materials
using
proper
or not
chemical
difficulty
attendant
its admission
proceeds.”
as the student
as evidence arises in the consideration of
in establishing
effect
a standard of con
testimony
At the time the
duct
dentiary
contradistinguished
from its evi
admitted,
professors
the ob
two
jections
over
competent,
value insofar
defendant,
the court defined
together with all the other facts
cir
which it was admitted
*5
jury
cumstances submitted to the
many
how
dif
stating: “I want to find out
question
determination
of whether
May
ways
be a
ferent
it could
done.
or not the conduct
of the defendant
each
ways might
it
be done.
different
dozen
particular
care,
ordinary
case evidenced
or
question ultimately
be if
Then
would
lack
of it.
your
differently from
man did
ait
little
witness, whether
this witness or some other
question
may
The
is:
the conduct
jury
say
negligent
this
would
one was
others,
plan,
system, employed by
or
not,
negligent,
the other was
or
both
them, be
tending
considered as evidence
to'
anything
right.
both
leave
to
or
them at
all
If we
a fact
show as
or circumstance
we can leave.”
all that is all
particular
complained
act or omission
negligent
pru
ordinary
in that an
jury,
to the
when the
his instructions
person,
like
dent
under
similar circum
or
raised,
question
again
the court in-
would
stances
in the
have acted or not have acted
jury
re-
“I will
follows:
structed
frame
way?
same
light,
it
Viewed
this
it,
now,
say
jury
to the
jury
accept
reject
is for the
to
or
the con
practice
in other universities
re-
usual
duct, plan
system
or
of others
its dis
experiments
spect
this or similar
in re-
to
application
cretion in the
of these facts to
supervision
spect
may
by
be considered
to
by
of care
standard
enunciated
you
determining
not Dr.
Wigmore
Evidence,
court.
on
vol.
due and
exercised
reasonable care
Johansen
in
461.
section
particular
practice
this
instance. Such
conclusive,
would not be
is a matter
but it
If the
is
evidence
and the
admitted
under all the circumstances of the case that
admonished,
jury is
either at the time it is
you may take into consideration.”
by proper
admitted or
instruction in con
admission,
earnestly
The defendant
that nection with its
contends
that it was ad
testimony
merely
precautions
of the admission of this
what
the effect
mitted
were
to show
by
generally
a standard of
in such
was to establish
comparison
care
taken
cases as bear
ing upon
degree
enjoined upon
and that the
of care
by
relationship
be established
his
defendant cannot
the defendant
to
comparison
upon
plaintiff,
think
of care based
way
we
the evidence
admis
standard
is
university
purpose.
some other
con- sible
this
Pence v. Cali
with
ducted the
Company,
experiment.
Mining
Utah
fornia
P. 934.
same
this extent
is not admitted
To
it
testimony
admission of the
and the
The
purpose
showing to
for the
custom or
pur-
concerning
instruction of the court
by comparison.
establish a rule of conduct
it
poses
which
be considered
could
together.
simply
ruling
treated
way,
Stated another
it is
an
court,
time
inquiry
ordinary
the evidence was of-
manner
at
performed
fered and admitted and
instruction which such instruction is
thereto,
jury
given
is
with reference
defined the from such circumstances it
in this
the defendant
for which it was admitted and
to determine whether
per-
in the science of their
not
failure one
learned
guilty
negligence in its
case was
That
the result.
is
adequate supervision over the formance
evidenced
provide
inherent
learned is
not
plaintiff.
Western
Fritz
work of the
Therefore,
be-
263, her
student.
as a
Telegraph Company, Utah
status
Union
8á3 gifts charitable chara ed with funds derived from organizations this granted are from paid operating costs cter.3 gifts are charitable funds derived from tort li- general agency and The rules of de- substantially revenues greater than the ability applicable case. It in this are operat- The rived tuition. from students’ paid disputed that Dr. not instructor University is ing per cost student to University and defendant per student per year. tuition The $175 scope duties acting in of his that he was as accepts wid^ University per year. The $75 com- such at the time of the accident grants daughters part ows’ tuition plained of. worthy scholarships students. judgment The of the trial court is af- firmed. At the the accident the time of age duly years was 18 and a enrolled Rehearing. Petition On University. During the student at course, spring quarter she took Rehearing denied. Chemistry II, known as which included laboratory experimentation. accident PHILLIPS, Judge (dissenting). Circuit Kay plaintiff, occurred while An- Afton Lillywhite1 brought Edith C. Mrs. derson, Lucy jointly en- Rice were University2 against Brigham Young action gaged performing experiment No. 11 of damages personal injuries. to recover Chemistry quarter In the fall of 1932 II. nonprofit corpora- is a course, had taken a known as object, tion. Its as set forth in articles I, Chemistry gave in which the instructor incorporation, establish main- is to experiments. lectures arid conducted Dur- learning. college tain It estab- ing that course instructor had demon- Brigham Young, by the late lished in 1875 strated No. 11 and warned the president Church then of Jesus against the hazard con- explosive Latter-day Saints, by deed Christ of with the use of nected opportunities provide educational trust to against promiscuous mixing In 1896 was the Church. to members of incorporated gredients knowledge without of their na- by the Church and has since ture. gifts donations been maintained manual, pursuant to which the stu- others, and from tui- from the Church conducting experiment dents were No. It has no tions received capital students. manganese called for the mixture of either average annual attend- stock. The dioxide or ferric oxide with 2300 students. ance from 1929 to It chlorate. also called for the use of sul- June, 1939, July, From the Church phur phosphorus oxy- and red to test for appropriated Uni- for maintenance of the gen. gave detailed It directions as to each versity, $5,884,272.32. year 1938- step carry- to be taken the student in plant the value of the educational ing experiment. Chemistry out the II was buildings, $1,- land follows: taught day 031,950.56,' $358,082.62. On the equipment, In the *8 Johansen. n accident, plaintiff and 1938-1939, her fellow stu- year received Church, $310,000, completed experiment had dents 10 from the from endow- No. income, $4,971.34, preparation ment fund tions, $152,032.91. Thus, from which demonstrated the tui- oxides, oxygen peroxides, will be seen and chlor- plant equipment provid- that the were The text of manual ates. covering ex- ease, injured supra patient paying the Session [94 Utah is a so-called 653], irrespective patient, the writer of ma- P.2d of tbe ebaraeter * * jority opinion institution, concluded: A “* charitable or charity neg- eleemosynary hospital operated held not to immune for or one * * * ligence servants, profit. even when If this be the correct by analysis decision, wholly is conducted an arm of stitution then it is powers granted unnecessary to do so.” to state determine whether defend- specially Justice, concurring, One stat- ant is a charitable institution or one or- respondeat ganized operated profit “I think the doctrine of ed: since the apply.” superior liability should rule of will be the same in either dissenting, “My One Justice stated: un- event.” derstanding majority plaintiff. decision is Hereinafter referred to as hospital the defendant is held lia- Hereinafter referred to as the Univer- any negligence sity. ble for of its nurses where 8áá periment following number, or No. contained the three among circulated caution: chlorate they “Sodium or class to see up apparatus set directed;' mixed an as with combustible material form laboratory and that the explosive open off mixture which set never during the absence of instruc- slight anything mix with tors supervisors.- friction. Never or you do chlorate instructed to are unless Neither Mr. Quinn Howell nor Mr. tes- so.” experiment No. completing After tified duty that it practice was the or plaintiff ob- and her fellow students professor supervise to mixing tained the stock room materials from the the materials. materials No. Howell testified: were beakers and obtained in test or tubes mixing “As far as the chemicals plaintiff were labeled and her fellow are concerned inside it would be absurd slips paper they with were to my think checking'that. I to have charge person to them handed the depend they pay fact that do atten- room. The established stock evidence given tion to what is them in the manual proper materials were furnished. and what I have instructed them with re- up Plaintiff and her fellow students set gard to good the course and their own apparatus proceeded experi- their with judgment.” doing, they No. 11. In inadvert- ment so Quinn testified: with red ently chlorate mixed quite “It difficult observe as phosphorus with ferric instead of oxide whether or using were not' They applied
manganese dioxide. then using proper chemical as the exploded materials mixture Bunsen burner and the proceeds.” student injuries plaintiff. causing Mrs. Anderson testified that Dr. testimony that Dr. Johan- There was Johansen sen had told them to read the instructions equip- obtain their directed students to and had them. discussed the directions with apparatus, them -up ment and set told testified return he had to leave the room but would Johansen general discussed the directions with the equipment, inspect apparatus their students. Dr. testified that he until he had re- Johansen and directed them to wait very told them to read the directions thor- inspection. An- Mrs. turned and made oughly and often and to follow them care- did not remember derson testified Dr. she fully. proceed instruction not to Johansen’s her apparatus. until he had checked the The After fellow students up testified to the secured the materials and had set same effect. apparatus and had mixed the materials and Howell, Harvey an instructor in chemis- burner, ready apply the Bunsen try High -in Salt Lake the East School apply- hesitant about Anderson was Mi's. ing testified, City, objection counsel over She testified that one or the burner. University, giving the course that in girls urged go the other her both of Chemistry High placed II at the School he applied burner and then ahead. She poster large in the front of the classroom explosion occurred. carefully from which students could alleged The basis setup; their that he check insisted alleged failure of Dr. complaint was the setup being by him checked before the dangers against warn applied; used heat was that he also a di- Johansen phos- mixing potassium sheet which stated “Check that set- rection explosive and the materials phorus okeh,” up. left Get and that he never proper- alleged of Dr. period. failure during room *9 experi- ly carrying of the supervise out the Quinn, professor of chemis- Elton L. ment. University Utah, try of who had the at evidence, the Uni- all the the close University At of taught Princeton and also for a directed ver- versity court Mines, moved the State School of testi- Mexico New grounds that the favor on the dict in its objection of Uni- fied, counsel the over charitable institution and University was a in Chem- giving in the course versity, that any, negligence, of if liable for the against not II, always warned the class istry he failed plaintiff had potassium Johansen; mixing danger, Dr. explosive of the part Dr. any of negligence on the prove potassium chlor- to phosphorus, and chlorate in- proximately caused the that sulphur, and ate and Johansen by the injury was caused assistants, the jury; his that carbon; and he two that supervision stu- plaintiff finding fellow materials. A that negligence and her of mix- prevented fellow would mistake dents; plaintiff and her have the in and that ing which based on guilty negligence would have been students were of materials I, therefore, The proximately injury. conjecture. mere conclude to her contributed fail- negligent that if in trial Dr. court denied motion. Johansen negli- ing gence supervise students, such jury: The court instructed proximate of not the cause “ * * * practice in that the usual oth- injuries plaintiff. respect er in similar universities to this or my opinion It may is also that the court erred experiments respect supervision giving quoted There instruction. you determining be wheth- considered practice no evidence the usual er or not Dr. exercised due Johansen Testimony other universities. as to particular reasonable care in instance. practice High School followed at the East practice conclusive, Such would not but be University estab- Utah did not it is a matter under all circumstances customary practice lish a or standardized you may of the consid- case that take into universities. eration.” Utah, Under the law char- whether a special interrogatories, In answer to liability itable exempt institution jury from plaintiff that found and her fellow officers, negligent acts of its em- negligently students made the mistake ployees, depends upon mixing chemicals, servants wheth- wrong and that the er the cost which ren- service mistake was the result Dr. failure of preponderates ders charge so made supervise Johansen justify therefor as to performing conclusion that it No. performing pure charity. failing that was not prevent mixing observe and In Sessions v. Thomas Dee Memorial phosphorus chlorate. Hospital Ass’n, 89 Utah 51 P.2d 232,the court said: general The returned a verdict plaintiff. Unversity favor “There are other cases where char- terposed judgment, a motion for notwith- question acter of the institution verdict, standing the denied. determination. When the character judgment thereon, From the entered been, institution has from the evidence or appealed. has sufficient, from pleadings if are charitable, determined to be then the rule evidence established exemption liability for tort of its during was warned the course in Chemis- generally' ap- servants plied. from taxes is try respecting I explosive hazard of * * * potassium chlorate; that the directions re- specting experiment No. contained a “The fact that an- organ- association is specific warning against danger, capital such and ized with or without stock is mat- proof, may weigh instructed the students ter and as such for or Johansen (cid:127) carefully against to read the instructions and thor- its claimed charitable character. oughly carefully may and to follow It matter them. So of whether the institu- me, therefore, payment patients, seems to case turns tion exacts for all only part them, whether Dr. yras negligent none of them. So supervising experiment, may profits manner and amount of accumulations, any, purposes whether such proxi- if injury. thereof, testimony mate cause of the and manner of distribution ór use may privately adduced in behalf of that whether the institution showed practice ownership was the in two other owned and the nature institutions setup use, pro- activity engaged check the before the student in—all are ceeded with the practically impossible it was matters of evidence. The or service use supervise to which the institution prqper- devotes its check mixing attained, ty, and the ultimate ends to materials. The acci- dent Thus, here important was not caused error in for consideration. setting up apparatus, properties organiza- but was certain *10 due, jury found, as generally recognized may to a mistake in tion as charitable mixing production the materials. The evidence be devoted to the profit ad- income or by plaintiff private corporation in- duced established that the the same as a or- supervise profit. mixing ganized may structor could not for property Such n itable, so, pursuing and exempted purpose, taxation because the law from its society ques- is immunity purpose seems to be the association or settled. What the tion here submitted is: the contract that of a charitable institution. Does “pay” in- for characterizes take the institution out of the evidence establishes protection rule, or, for determina- as the stitution. character in so far Its is concerned, contract pay court or for make the tion from the evidence the institution ject proper instruction a not sub- under business institution * * * * * * immunity?’ to the charitable court. “ attaches, ‘Whether or not that character v. Gitzhoffen “As said in the case of was us, it seems proof to is a matter of Holy Hospital Ass’n Sisters of Cross [32 ** * all the circumstances case.’ L.R.A.,N.S., 691, 695, 8 Utah 88 P. otherwise, “Put where a contract 1161]: agreement volves an perform to “ a service corporation was ‘The fact compensation for although gen- pay, or maintaining and formed for the purposes eral may be charita- actor hospitals treatment conducting for ble, yet, particular gen- in the instance and sick, wounded, injured persons, and eral purposes character or actor infirm, con- is not for care may not without more be invoked as a de- done things for trolling, for such law, pleaded fense a matter of * * * charity.’ profit as as for well complaint by way answer or or “ pub- charity general gift ‘A is a giv- defense. There are where a instances rich well extends lic use which agreement may partake largely en so charity and poor. The test of a as to the compensatory profit-taking elements as organization are in charitable test of a activity to remove the the charitable from principal distinc- and law the same. occur, readily field. will one Instances may organization a charitable tive features be where services are crit- pro- capital no are that no stock and it has comparatively simple,' ical but and com- a profits, making but vision for dividends or pensation beyond a reasonable one for ei- public mainly derives its funds service, skill, responsi- ther technical private charity, in trust for and holds them bility, profits yet and the are considerable expressed objects purposes in its gift. not a are combinations where There ” charter.’ preponderates contract service so justify as to that the actor conclusion case, appeal On the Ses- second performing pure charity.” was Hospi- Memorial sions Thomas D. Dee Here, Ass’n, Utah, 460, organized P.2d tal nonprofit corporation. appeared Hospital 1896 as a it charitable Memorial no year capital It has rendered charitable services stock. Its articles of in- $13,913.87 corporation provision profits no amounting income was make and its $171,814.38; profits opera- and it year 1933 it no from its that in the ren- derives amounting mainly tions. Its funds are derived from dered charitable services $10,712.53 $172,018.30; gifts charitable exclusively holds and uses them its income purposes. While year 1934 it charitable for charitable rendered $9,013.94 charges it year, amounting to and its in- the student tuition services $75 plant year its was established $201,059.07; that educational come gifts, operating with charitable rendered charitable services and of its per $10,349.70 income cost student is derived from char- amounting and its $100 only gifts $207,467.49; patients were able itable from tuition. who $75 rates; facts, given When these pay charged standard consideration profit oper- I think it be said the cost hospital from its the ations, derived profits expended for en- value of the educational service rendered such preponderate charge improving plant; the tuition as to larging and that so its per- justify patient pay the conclusion that the actor is plaintiff was received aas charity, forming pure immune held under rates. The court at standard liability hospital for the of its em- not im- from those facts that liability ployees. for the acts mune from servants, employees. agents, my opinion that the court erred It is opinion court said: denying the motion for a directed verdict “ established, judgment, notwithstanding institution, ‘Once it is ver- association, corporation dict, judgment society, below should is char- and that
847 reversed, I, therefore, Turner, Rodgers respectfully Frank Scurlock and J. Dallas, Tex., Winn, dissent all of and Donald denying petition & the order Woodward, Campbell Guy FI. both of rehearing. Tulsa, Okl., appellants. Saye, Saye Long- N. and W. T. both of J. Tex.,
view, appellee W. D. Ambrose. Mann, Atty. Gen., Texas, C. Gerald Cale, Barcus, Edgar W. and Geo. W. & STANOLIND OIL GAS et v. CO. al. Hart, Gen., Atty. Texas, P. Asst. James AMBROSE et al. appellees Railroad Commission of Tex- No. 9701. and its individual members. Appeals, Circuit Court of Fifth Circuit. HUTCHESON, FOSTER, Before April 5, 1941. McCORD, Judges. Circuit HUTCHESON, Judge. Circuit growing long of that This another list been filed in of suits which have federal Texas, invalid, and state courts in to hold cancel, orders of the Railroad Commis exception drilling granting sion a Rule 37 permit. majority great As of those many already cases, so have been breaches exceptions let into the numerous rule it, granted complainants and the suit, though complained against in legally,1 practically, not rule has almost disappeared. court, Also as found the trial been, the fact that there has view of be, many years to continue for com will plete replacement plaintiff’s property it, very all the oil drawn from it is plaintiff has shown questionable whether damage drilling actual it from the permit finally, has authorized. And showing is no been there has permits. be refused additional or will Un quite clear der it is these circumstances requiring viewed as constitutional suit complained showing merely illegal unconstitutional, action is brought ground some clear it is within equity jurisdiction,2 the suit fail. if, be, appellants But insist it should 8, suit 6049c, Section viewed as one under Art. 1936, appel- Vernon’s Texas Statutes 510, 364, Refining 55, L.Ed. 300 U.S. 57 S.Ct. 81 1 Atlantic v. Go. Land Gulf Nortliport Light 518; 73; Co. v. Power & 59, Rail 131 S.W.2d Co., 134 Tex. 582, 581, 568, Hartley, 51 283 S.Ct. U.S. Oil Com v. Marathon road Commission City 1275; 517; Bart Fisher v. 75 L.Ed. Tex.Civ.App., S.W.2d 89 pany, 535; lett, Tex.Civ.App., Production, Smith 76 S.W.2d Gulf v. Commission Railroad Storage Co., Tex. v. Wald affirmed, & 505, Transfer Tex.Civ.App., 115 S.W.2d 991; Civ.App., Boxrollium 97 S.W.2d 254. 122, 132 S.W.2d Tex. 134 Judge Court, Smith, 3 District Co. v. Oil California v. 2 Commission Railroad Cavanaugh 626; F.Supp. 624, Loon v. 388, 4 Co., 58 S. 302 U.S. & E. G. Pacific 142, 453, L.Ed. ey, S.Ct. 319; 248 U.S. 39 63 Farm Borden’s 334, L.Ed. Ct. 354; Texas v. Railroad Commission Baldwin, 293 U.S. v. Co. Products Co., Thompson Oil U.S. 281; Nichols Rowan & L.Ed. S.Ct. Corporation, S.Ct. 84 L.Ed. Utilities Gas Consolidated