Wilkesbarre City Hospital v. County of Luzerne

Chief Justice Agnew delivered the opinion of the court, The seventh section of the ninth article of the new constitution of 1874, declares that “ The General Assembly shall not authorize any county, city, borough, township or incorporated district to become a stockholder in any company, association, institution or corporation; or to obtain or appropriate money for, or to loan its credit to any corporation, association, institution or individual.” This section is a substantial re-enactment of the seventh section of the amendments to the constitution of 1857. The latter clause of the amendment of 1857 omitted the word “appropriate.” The convention of 1873 inserted this word to give the clause a wider effect. In the case of Speer v. The School Directors of Blairsville, 14 Wright 150, the amendment of 1857 wás thoroughly discussed, and it was held that the words “to obtain money for, or loan its credit to any corporation, association, institution or party” did not apply to raising money on the bonds of the municipality for a public purpose, such as the payment of bounties to relieve the people of the municipality from an impending draft, by lot, into the military service. In such a case, the purpose is payment in discharge of a duty or obligation lying upon the municipality, not a loan or advance for purposes private in their nature, or made in aid of private corporations or parties. It was said there, “ There is not a word in the amendment which interdicts the borrowing of money merely, or the pledging of the public credit for municipal purposes, to be laid out by authorized public officers. The purpose was to prevent the money of the people from passing into the control of private irresponsible associations or parties, and from being squandered in undertakings of doubtful propriety, or being liable to be lost through the want of integrity of those engaged in its disburse [60] ment. It intended to confine the municipal expenditures not only to public objects, but to public officers or agents under their direct responsibility to the municipality.” This interpretation given to the amendment of 1857 was well known to the members of the convention of 1873, for the subject of bounties was one which engaged the attention of the whole state; and the decision came home to every borough, city, township and county. The convention did nothing to weaken the force of the amendment of 1857, and on the contrary added to its strength by inserting the word “ appropriate,” and substituting the word “individual” for “party.” The words “ obtain money for or loan its credit to” applied only to the use of the liability or the credit of the municipality ; but the insertion of the word “appropriate” expanded the effect of the section, so as to embrace money in the treasury itself. A law enabling a private incorporated hospital to make requisitions upon a county, for the payment of its charges for the support of patients under treatment, even though they be paupers, is an appropriation of money by the county to the corporation and comes within the prohibition of the constitution. It is not a payment of any debt incurred by the county, but is a transfer of the money by operation of the Act of Assembly from the treasury of the county to that of the hospital. The hospital exercises no municipal function, but takes as a private institution by a mere act of appropriation. It is under no obligation to open its doors to municipal inspection or visitation, and cannot be controlled or called to an account for the moneys drawn upon requisition — once paid the money is beyond the control of the county. Thus its expenditures may be lavish, and the public funds are liable to be misdirected or squandered, without check, through extraordinary charges and unfair requisitions. In Speer v. School Directors, supra, care was taken to distinguish between those necessary governmental purposes, and that proper official disbursement, which are essential to the welfare of society, and for which municipal liability and credit must often be pledged; and those-purposes, however public in their nature, which are administered by private, and in a legal sense, ii’responsible hands. The essential powers of government must not be crippled by a too stringent withholding, while it will not do to endanger the public interests by an extension of pecuniary obligations, which, owing to the hands which expend, may result in financial embarrassment and injury. The constitutional restriction is wise in its purpose and ought to be liberally construed for the protection of the people, and strongly against the inhibited institutions aud parties. Judgment affirmed. Sharswood and Pax son, JJ., dissent.