State Ex Rel. State State Hospital at Raleigh v. Security National Bank

178 S.E. 487, 207 N.C. 697, 1935 N.C. LEXIS 246

• Court: Supreme Court of North Carolina
• Decided: January 28, 1935
• Status: Published

Opinion

CONNOR, J.

There is no error in the judgment in this action. The judgment is in accordance with the contentions of the plaintiff that on the facts agreed, and under the law applicable to these facts, the plaintiff is entitled to recover of the defendant the sum of $3,270. It appears on the face of the judgment that each and all of the contentions of the defendant were carefully considered by the court, and upon such consideration were not sustained. In this there was no error.

The State Hospital at Raleigh is a public corporation, created by the General Assembly of North Carolina as an agency of the State for the care, treatment, and maintenance of insane persons who are residents of this State. It is supported primarily by funds appropriated from time to time by the General Assembly out of the revenues of the State derived from taxes paid into the State Treasury. It is under the management of a board of directors, whose members are appointed by the Governor of the State, and whose appointments are subject to confirmation by the State Senate. The corporation is at all times and in all respects subject to the control of the General Assembly of North Carolina.

The State Hospital at Raleigh, as a public corporation, owns and operates a hospital, which is located on Dix Hill near the city of Raleigh. This hospital is one of the charitable institutions of the State of North Carolina and is maintained by the State in recognition of the principle that “beneficent provision for the poor, the unfortunate, and orphans is one of the first duties of a civilized and Christian State.” Const. of N. C., Art. XI, sec. 7.

It is provided by statute that the board of directors of the State Hospital at Raleigh shall make such rules and regulations for the operation of the hospital owned by said corporation as shall make said hospital as nearly self-supporting as is consistent with the purpose for which it was established. C. S., 6162. This statute was in force on 12 February, 1919, when Earl N. Letts was admitted as a patient in said hospital. It declares the policy of the State with respect to the opera tion of the State Hospital for the Insane at Raleigb as well as for the operation of similar institutions.

It is further provided by statute that in the admission of patients to the State Hospital at Raleigh “priority of admission shall be given to the indigent insane, but the board of directors may regulate admissions, having in view the curability of patients, the welfare of the hospital, and the exigency of particular cases. The board of directors may, if there be sufficient room, admit other than indigent patients upon the payment of proper compensation.” C. S., 6186. This statute, which was also in force on 12 February, 1919, shows that it was contemplated by the General Assembly that a distinction should be made by the board of directors of the State Hospital at Raleigh between patients who were indigent and patients who were nonindigent, and that the latter would be required to pay the costs of their care, treatment, and maintenance by the hospital, while no charge would be made by the hospital for the care, treatment, or maintenance of the former. There is nothing in this statute, however, or in any other pertinent statute, which shows that the status of a patient, with respect to his financial condition, shall be finally determined as of the date of his admission to the hospital. It would be manifestly unjust to the State and its taxpayers, and in some cases to patients of the hospital, if the statute so required. Experience shows that the financial condition of persons, whether sane or insane, is subject to frequent changes, and that patients who are indigent at the date of their admission, as defined by this Court in In re Hybart, 119 N. C., 359, may subsequently become nonindigent, and vice versa. The Constitution of North Carolina empowers the General Assembly to provide that indigent insane persons shall be cared for at the charge of the State. Const. of N. C., Art. XI, sec. 10. There is no provision in the Constitution requiring or authorizing the General Assembly to provide for the care, treatment, or maintenance of nonindigent insane persons at the expense of the State. The General Assembly has at all times by appropriate statutes required such persons to pay at least the actual cost of their care, treatment, and maintenance, while they are patients in State institutions.

Chapter 120, Public Laws of North Carolina, 1925, was ratified on 4 March, 1925, and has been in full force and effect since said date.

This statute provides, among other things, that all persons admitted to the State Hospital at Raleigh or to any of the other charitable institutions of this State named in the act, “be and they are hereby required to pay the actual cost of their care, treatment, training, and maintenance at such institution,” and that such actual cost shall be determined from time to time by the board of directors of such institution.

The sections of the act which are applicable to the instant case are as follows:

“Sec. 4. From and after tbe passage of this act the respective boards of trustees or directors of eacb institution shall ascertain which of the various patients, pupils, or inmates thereof, or which of the patients, guardians, trustees, or other persons legally responsible therefor, are financially able to pay the cost to be fixed and determined by this act, and, so soon as it shall be ascertained, such patient, pupil, inmate, parent, guardian, trustee, or other person legally responsible therefor shall be notified of such cost, and in general of the provisions of this act, and such patient, pupil, inmate, or the parent, guardian, trustee, or other person legally responsible therefor shall have the option to pay the same or to remove the patient, pupil, or inmate from such institution, unless such person was committed by an order of a court of competent jurisdiction, in which event the liability for the cost as fixed by this act shall be fixed or determined and payment shall be made in accordance with the terms of this act.”

“Sec. 5. That immediately upon the fixing of the amount of such actual cost, as herein provided, a cause of action shall accrue therefor in favor of the State for the use of the institution in which such patient, pupil, or inmate is receiving training, treatment, maintenance, or care, and the State, for the use of such institution, may sue upon such cause of action in the courts of Wake County, or in the courts of the county in which such institution is located, against said patient, pupil, or inmate, or his parents, or either of them, or guardian, trustee, committee, or other person legally responsible therefor, or in whose possession and control there may be any funds or property belonging to either the said pupil, patient, or inmate, or to any person upon whom the said patient, pupil, or inmate may be legally dependent, including both parents.”

“Sec. 6. That no statute of limitations shall apply to or constitute a defense to any cause of action asserted by any of the above-named institutions for the collection of the cost of care, treatment, training, or maintenance, or any or all of these, against any person liable therefor, as herein provided, and all statutes containing limitations which might apply to the same are hereby pro tanto repealed, as to all such causes of action or claims and this section shall apply to all claims and causes of action for like cost heretofore incurred with such institutions and now remaining unpaid.”

“Sec. 7. That this act shall not be held or construed to interfere with or to limit the authority and power of the management of the boards of trustees or directors of any of the institutions! named herein, to make provision for the care, custody, treatment, and maintenance of all indigent persons who may be otherwise entitled to admission in any of the said institutions, and as to indigent pupils, inmates, and patients, the same provisions now contained in the several statutes relat ing thereto shall continue in force, but if at any time any of the- said indigent patients, pupils, or inmates shall succeed to or inherit or acquire, in any manner, property, or any of the persons named above as legally responsible for the cost of care, treatment, and maintenance of the pupil, inmate, and patient at the above-named institutions shall acquire property, or shall otherwise be reputed to be solvent, then each of said institutions shall have the full right and authority to collect and sue for the entire cost and maintenance of such inmate, pupil, or patient, without let or hindrance on account of any statute of limitations whatsoever.”

Under the foregoing statutory provisions, the plaintiff is entitled to recover in this action the entire cost of the care, treatment, and maintenance of Earl N. Betts by the State Hospital at Raleigh, as determined by the board of directors of said hospital, unless, as contended by the defendant, such of said statutory provisions as are applicable to this case are void.

It must be conceded, we think, that the plaintiff is entitled to recover the actual cost of the care, treatment, and maintenance of Earl N. Betts by the State Hospital at Raleigh, since he ceased to be an indigent patient of said hospital. "When he became a nonindigent patient of the hospital, he had no further right to its care, treatment, and maintenance at the expense of the State, because he had been admitted to the hospital as an indigent patient. After he became nonindigent, he had the same right as other nonindigent patients — that is, the right to remain in said hospital as a patient only so long as he or his guardian paid the actual cost of his care, treatment, and maintenance, or until he had been lawfully discharged or removed from the hospital. The statutory provisions to that effect are manifestly not void. The provisions of the statute which confer upon the State the right to recover for the use of the State Hospital at Raleigh the entire cost of the care, treatment, and maintenance of a 'patient in said hospital who, although he was indigent at the date of his admission, thereafter has become nonindigent, are not void, because such provisions are retroactive in purpose and effect. Neither the State nor the State Hospital at Raleigh is under any contractual obligation to a patient in said hospital who was indigent at the date of his admission, and for that reason as a matter of State policy is cared for, treated, and maintained at the expense of the State, or of the said hospital, to continue such care, treatment, and maintenance after such patient has ceased to be indigent. See Hospital v. Fountain, 129 N. C., 90, 39 S. E., 734, and 128 N. C., 23, 38 S. E., 34. In that case it was held that the guardian of an insane person who was indigent when she was admitted' as a patient in the State Hospital at Raleigh, but who thereafter became nonindigent, was liable for the cost of ber care, treatment, and maintenance by tbe hospital, both before and since she became nonindigent. See, also, S. v. Rommee, 93 Conn., 571, 107 Atl., 519, where it is said by the Court: “The State, in making expenditures for the care and support of an insane person committed to an institution designed to provide the support and attention which he needs enters into no contract relation with that person. It simply acts of its own volition, in response to the dictates of humanity, in the performance of a governmental duty now recognized as resting upon a modern State, and for the good of the individual concerned. There is not only no promise on the part of the State to the unfortunate, or his personal representatives, but no legal consideration for one. The burden which the State assumes and bears is assumed and borne as its purely voluntary undertaking, and not as a result of a contract obligation to that end entered into' with him, or other person representing him.”

The contention of the defendant in this action that the estate of its ward now in its hands as his guardian is not subject to the claim of the plaintiff because such estate consists of securities purchased from time to time by his successive guardians with funds paid to them by the United States Government as compensation awarded to- Earl N. Betts as a veteran of the United States Army, under the provisions of the act of Congress, involves a construction of section 454 of Title 38 of the World War Veterans’ Act, 1924. This section is as follows:

“Sec. 454. The compensation, insurance, and maintenance and support allowance payable under Parts II, III, and IV, respectively, shall not be assignable; shall not be subject to the claims of creditors of any person to whom an award is made under Parts II, III, or IV; and shall be exempt from all taxation. Such compensation, insurance, and maintenance and support allowance shall be subject to any claims which the United States may have, under Parts II, III, IV, and V, against the person on whose account the compensation, insurance, or maintenance and support allowance is payable.”

This section was construed by this Court in Martin v. Guilford County, 201 N. C., 63, 158 S. E., 847. It was held in that case that where money which had been awarded to a veteran of the United States Army under the act of Congress as compensation has been paid to him, and has been invested by him in the purchase of property in this State, such property is not subject to the provisions of said section, and is therefore not exempt from taxation by the State. The section was so construed by the Supreme Court of the United States in Trotter v. Tennessee, decided on 4 December, 1933, and reported in 290 U. S., 354, 78 L. Ed., 358. Justice Gardozo, writing the opinion in that case, and speaking for the Court, says:

“We think it very clear that there was an end to the exemption when they (the moneys paid as compensation) lost the quality of moneys and were converted into land and buildings. The statute speaks of ‘compensation, insurance, and maintenance and- support allowance payable’ to the veteran, and declares that these shall be exempt. ¥e see no token of a purpose to extend a like immunity to permanent investments, or fruits of business enterprises. Yeterans who choose to trade in land, or in merchandise, in bonds, or in shares of stock, must pay their tribute to the State. If immunity is to be theirs, the statute conceding it must speak in clearer terms than the one before us here.”

Under the statute as construed by the Supreme Court of the United States and by this Court, the contention of the defendant cannot be sustained. The estate of Earl N. Betts, consisting of securities now held by his guardian, is subject to the claim of the plaintiff in this action, notwithstanding the fact that such securities were purchased by his guardians with moneys paid to them by the United States Government as compensation awarded under the act of Congress to the said Earl N. Betts as a veteran of the Army of the United States.

We find no error in the judgment in this action. It is

Affirmed.