Phoenix Assurance Co. v. Salvation Army

This is an action to recover damages inflicted upon plaintiff’s assignors by the. negligent operation of an automobile by a servant of defendant. Judgment Went for plaintiff and defendant appeals.

It was stipulated at the trial that appellant is a charitable institution, and the record shows that at the time of the occurrences out of which the action arose the driver of the automobile was proceeding from one city to another for the purpose of engaging in a part of the religious and charity work which it is the object of appellant to perform. Appellant contends for a reversal of the judgment on the ground that, because of the purposes for which it exists, and because of the trust character of the funds which are at its disposal, it is exempt from that liability which would attach to a business or profit-making corporation in the situation which appellant occupies under the facts of the present litigation. Upon the question thus suggested the cases in the other states of the Union are in hopeless irreconcilability, and the decisions of the jurisdictions which are ranged on the respective sides of the controversy exhibit a width of discussion which has practically exhausted the subject. The line of reasoning on one side is, we think, strained and unconvincing, although the cases which follow it reach back to a greater antiquity than do those which support the opposite view. The courts of this state have never espoused either side of the discussion, for the exact question has never arisen here. The present ease is one of first impression in California.

The states which have aligned themselves with the view which supports the contention of appellant, or, at least, some of them, are indicated by the following list of eases, in which is contained the last pronouncement, as far as we can discover, of the courts of each jurisdiction: Parks v. Northwestern University, 218 Ill. 381 [4 Ann. Cas. 103, 2 L. R. A. (N. S.) 556 , 75 N. E. 991 ]; Loeffler v. Trustees of Sheppard Hospital, 130 Md. 265 [L. R. A. 1917D, 967, 100 Atl. 301 ]; Zoulalian v. New England Sanitorium, 230 Mass. 102 [L. R. A. 1918F, 185, 119 N. E. 686 ]; Whittaker v. St. Luke’s Hospital, 137 Mo. App. 116 [ 117 S. W. 1189 ], but see reservation in the opinion upon the question whether a. charitable institution would be liable for damages occasioned by an act of negligence committed in a public street; O’Neill

One or two quotations will serve to show the reasoning of the decisions generally which support the contention made by appellant here. “An institution of this character, doing charitable work of great benefit to the public without profit, and depending upon gifts, donations, legacies, and bequests made by charitable persons for the successful accomplishment of its beneficial purposes, is not to be hampered in the acquisition of property and funds from those wishing to contribute and assist in the charitable work by any doubt that might arise in the minds of such intending donors as to whether the funds supplied by them will be applied to the purposes for which they intended to devote them, or diverted to the entirely different purpose of satisfying judgments recovered against the donee because of the negligent acts of those employed to carry the beneficent purpose into execution” (Parks v. Northwestern University, supra).

In one of the outstanding opinions on the subject the court said: “ [T]he exemption of public charities from liability in actions for damages for tort rests . . . upon grounds of public policy, which forbids the crippling or destruction of charities which are established for the benefit

Here are some of the adjudications which stand in opposition to the contention made by appellant: Bruce v. Central

It is said in the opinion in one of the cases last cited: “The doctrine that the will of an individual shall exempt either persons or property from the operation of general laws is inconsistent with the fundamental idea of government. It permits the will of the subject to nullify the will of the people. Nor can I conceive any ground upon which a court can hold that effect can be given to that will when it relates to property devised or conveyed for the purpose of a charitable trust. Such a holding must rest upon the argument that the advantages reaped by the public from such trusts justify the exemption; that is, as implied to this case, the advantages to the public justify defendant’s exemption from liability for wrongs done to individuals. If this argument is sound—its soundness may be questioned, for there are those who will deny that the advantages to the public justify the wrong to the individual—it should be addressed to the legislative, and not to the judicial, department of the government. It is our duty as judges to apply the law. We have no authority to create exemptions or to declare immunity” (Bruce v. Central Church, supra).

In an opinion which contains an exhaustive review of the authorities the court concludes: “In view of the principles above set forth, this court is of the opinion that both upon reason and upon authority, so far as the cases directly apply to the case at bar, the defendant corporation, although it is a charitable corporation, is liable, as any other corporation, for injuries to third persons caused by the negligence of its servants and agents in the care and management of its horses and teams while employed for its pur

Another decision contains the following: “This defendant, it appears from the evidence, conducted its affairs for the combined purposes of revenue and charity; the former being, in the religious aims of the members, subordinated to the latter as the ultimate object. But independently of this, had this corporation derived no revenues from its operations, and the funds which enabled it to carry on its benefactions were derived, not from its beneficiaries, but from endowments or contributions, it would not in our opinion make a particle of difference in its attitude to the law with reference to its legal duties and liabilities to persons in its service as employees. It was an incorporated body, chartered by its own volition, endowed with power to employ servants, and "with the capacity to sue and to be sued. It was not in any sense an agency of the state, nor has the legislature seen fit to extend to such corporations exemption from the well-known duties and liabilities imposed by the general law governing master and servant. This being so, defendant would be liable for injury sustained by its employee due to the negligence, if any, of itself, its managing officers, or agents or vice-principals, which is the case presented here” (Armendarez v. Hotel Dieu, supra).

In an excellent opinion, filed in one of the cases which adheres to the doctrine for which appellant contends, a dissenting justice said: “The Young Women’s Christian Asso

[1] We thoroughly agree with the view taken by the courts which adhere to a doctrine contrary to that upon which appellant asks for a reversal of the judgment against it, and we can add but little to what they have said in their reasoning upon the question. The courts which have declared for the exemption of a charitable institution from liability for torts of which strangers to the charity are the victims have shown an unnecessary solicitude for the welfare of such organizations and of their beneficiaries. They have assumed dangers to the administration of charities which do not exist, or which are so paltry as to furnish no adequate ground for the exemption from liability which they declare, with its attendant injury to those suffering damages from torts, or to their families. It is not at all likely that prospective donors to charities will withhold their benefactions merely because the institutions to which they contemplate donations may be compelled to render that justice which the

We are much impressed with the reasoning in one of the above quotations which is based upon the evident purpose of the law of torts to secure careful conduct on the part of those handling instrumentalities which, because of a lack of such conduct, may become engines of destruction. We think this state should not be added to the list of those whose courts have encouraged—as in some degree they surely have—the agents of charitable institutions to render less than due care for the security of life, limb, and property, the very things which it is the sole purpose of such institutions to preserve and protect.

Counsel expend much time in their briefs in considering the effect upon the present litigation of the opinions in Thomas v. German Benevolent Society, 168 Cal. 183 [ 141 Pac. 1186 ], and Stewart v. California Medical Assn., 178 Cal. 418 [ 176 Pac. 46 ]. Whatever the effect of those opinions may be in proper cases—for they are opposed to each other—they have no bearing here. The expressions in them to which counsel refer are concerned with the question of the liability of charitable institutions for damages inflicted upon those who voluntarily become beneficiaries of the charities administered by such institutions—those, for instance, who become free patients in charity hospitals—and suffer injury through the negligence of the servants of the institutions. It is well settled, with practically no dissent, that in such cases the institutions are not liable, if, at least, they have been careful in the selection of the servants. Under practically all the authorities such a question is very different from the one here presented.

Judgment affirmed.

Thompson, J., and Johnson, J., pro tern., concurred.