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an expense, they stand exactly in the same position as the preservation of law and order. To provide institutions, or to compensate such institutions for the care and maintenance of this class of persons, has for a long time been recognized as a governmental duty, and where institutions are compensated (except as hereinafter noted) for the care of indigent, infirm, and mentally defective, including certain physically defective, persons, such appropriations may well be sustained on this theory."

It is argued that the effect of this decision should be applied to the care of the needy poor contemplated by the act of 1925, and the various direct appropriations to hospitals. But the difference between the two illustrations is manifest; it lies in the words "without ability or means to sustain themselves." On the one hand there are persons totally indigent, as opposed to persons being generally able to take care of themselves, yet when sickness or injury overtakes them they are unable to provide proper treatment, and as to that they are indigent.

This activity of the state, however, is a discretionary duty. In Scibilia v. Philadelphia, 279 Pa. 549, 553, 32 A.L.R. 981, 124 Atl. 275, the Chief Justice describes these activities as being "governmental," "public," legislative," or "discretionary," and, further, as being "proprietary," "ministerial," "corporate," or "municipal." As the state provides for only 80 per cent of the total of this class of needy people, 20 per cent must look to the public generally to supply this particular charity. The government shares with the public the performance of this charitable work. It might do so on an equal basis or the above proportions might be reversed. Discretionary Discretionary acts are those of grace. They do not create rights, duties, or obligations. They are merely privileges accorded here because of the condition of life of those receiving aid. There is no right in the beneficiary to the privilege. It cannot be denied that the state may, if it chooses,

shut off all such relief without the slightest injury to the government or the great mass of its people. This illustrates most forcibly the discretion in performing the charitable acts.

Whether the charitable work is compulsory or discretionary, the performance is controlled by the Constitution. No function of government can be discharged in disregard of, or in op

Constitutional

functions.

position to, the fun- law-control of damental law. If governmental the performance of the proposed function can be done only in one way and that way is prohibited by the Constitution, then there can be no function or duty of government relating to the thing to be done. If the function may be performed in two or more ways, one of which is prohibited, then the performance of the function or duty cannot take place in such prohibited way. Overshadowing any proposed exertion of power, there is always the limitation of the Constitution. In this case no money shall be given "to denominational or sectarian institutions, corporations, or associations." It stands as a sentinel in its limited sphere to warn and prevent those in control who may attempt to invade the forbidden ground, and, when attention is directed to their conduct, the Constitution articulates through the courts. The state cannot secure performance of performance of a governmental governmental duty through a medium that has been prohibited from acting.

States-securing

duty.

As to the second proposition: It is true the department of welfare is an agency of government and not a sectarian or denominational institution, though, if the state's contention be correct, it might easily become one. It is urged that there is lodged in it power to secure any nonstate owned hospital it chooses, regardless of article 3, § 18, to execute the purpose expressed in the act of 1925, and the department alone controls the expenditure of the money appropriated. This is a unique pres

(290 Pa. 388, 139 Atl. 123.)

entation, but where does it lead us? Imagine the appropriation of millions to a state-created agency to be spent at its discretion in defiance of the Constitution! For illustration, suppose an appropriation of millions to the department of education to be used for educational purposes, as is now the case, and that department could contract with sectarian institutions for the education of our youth in such institutions, instead of providing this education through the means of the public schools. The grip that could be thus laid on state finances would soon become a matter of church polity, wherein all efforts directed against church control, so much feared by the framers of the Constitution, would be paralyzed. The mere statement of the possibilities that follow in the wake of such construction should be sufficient answer to this contention. Observe further as the present case, under the commonwealth's contention, demonstrates. The act has placed in the hands of one person the sum of $1,000,000, with unlimited power to distribute it among nonstate owned hospitals for the treatment and maintenance of the indigent sick, or, in other words, for charitable purposes. The individual at the head of this department could select only hospitals of the faith of appellant, and, after the accommodations of such hospitals became adjusted to continue the work, a new officer might be appointed, who, through prejudice, bigotry, or other cause, would select nonstate owned hospitals of other faiths or of no particular faith, and deny to those of appellant's faith any right to participate in the fund appropriated. Can it be doubted for a moment that a circumstance of like nature was one of the reasons which caused the framers of the Constitution to place therein the section now under discussion?

The government may lawfully appropriate to a department a sum of money to be expended for a designated purpose, and such expenditure may involve discretionary acts. This appropriation was to the de

partment of welfare; the money was to be paid out for a specific purpose and to designated agencies. We do not consider the question of its discretionary right to select one of the many nonstate owned hospitals as the medium to work out the legislative purpose as important, nor do we so consider the question of control of expenditures. trol of expenditures. Both rights are seriously questioned here. The mere fact that the hospital to be selected is left uncertain by the act does not eliminate the constitutional prohibition from the appropriation when it is selected,

to sectarian hos

even though the Public moneysmoney it is to re- pitals-constituceive was apparent- tions. tional prohibily given to the department. It has been designed that the state's money should go to reimburse a sectarian institution for the "treatment and maintenance of the indigent sick and injured" in medical and surgical hospitals not owned by the commonwealth. The right of selection is not written in the act, but admitting it, the appropriation is in reality not to the department, but to nonstate owned hospitals generally. This class includes, cludes, though not specifically named, sectarian and denominational institutions. The moment one is selected, such selection has the effect of writing into the act the hospital thus chosen to the same effect as though an appropriation had been made to it direct.

On the subject of control, the supervision of the distribution of the state's money to the hospitals selected, and the manner of ascertaining the amount due, effect a change of method only. There is no change in the character of payment. It is still designed to go to a sectarian institution for charitable purposes. The change by the Legislature as to what must appear before funds appropriated may reach an intended hospital, whether on account of a deficit, or, since the act of 1923, in payment of an operating charge based on a per diem charge, is merely a change of administrative work having no effect whatever on the

underlying purpose. The change was brought about to encourage the more economical operation of hospitals. The state still pays for "hospital service," which, in this connection, is a matter of charity. The same thought exists as to an observance by the hospital of the rules and standards for so-called service in treatment and maintenance. The right to make these rules is also disputed. Under the new method and the rules, better treatment is secured, or at least the treatment and maintenance is regulated; manipulation of the books is prevented; all of which aids in ascertaining what is justly due for the care of charitable patients. Neither the plan adopted for ascertaining the amount to be paid, nor the rules for treatment and maintenance, change the cause or purpose of payment. This is the case whether the money is paid through an agency, or is an appropriation direct to hospitals under the act of 1923, acts prior to, since, or under the Administrative Code (Pa. Stat. Supp. 1924, §§ 50a150a2902); all are underwritten by the state's charitable purposes, and neither rules nor standards so created will serve to obscure the constitutional provision applicable to such disbursements.

What is really done by the state as it relates to the control of expenditures is that the state reimburses the hospital for the money used by the hospital in caring for the indigent sick. The real control and spending agency is exclusively in the hospital and the act intended that it should be so. The money

which the state gives does not go into the hands of the indigent sick and injured, nor their doctors; it rests with the department only long enough to be taken out by the hospital in the method provided by the act. Whether the department, under the act of 1925 or the Administrative Code, possesses the power to fix standards so as to work out a certain amount of control, is immaterial, and we are not called on to decide that question at this time.

On the third contention: May the department contract with any hospital within the class for "hospital service," and buy that service like, for instance, the purchase of a bag of flour? The term is one invented by the officers of the government and by it the state officials hope to bridge the gap of unconstitutionality. Contract with a nonstate owned hospital, and for what? The state's money, by the act, is appropriated "for the treatment and maintenance of the indigent sick and injured" to relieve those who are too poor to pay the expenses necessary for treatment. The state does not undertake in any capacity to do the actual work. The state does not manage, conduct, take over or interfere with the internal or external affairs of the institution. The management is, as it has always been, in private hands. It is not similar to the work done at institutions that are state owned. What the state through its act in effect says to nonstate owned hospitals is: "For such of these unfortunates whom you minister to, I will reimburse you for treatment and maintenance."

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But accept the contract and the "term," and the thing that is done is none the less an act of charity moving from the state, though it may be called "hospital service,' treatment, and maintenance, SO many pills, or so many meals. Nor is the thing accomplished any the less the state's charity because it is worked out through the medium of a hospital, nor is the institution any the less sectarian because it, as a nonstate hospital, receives through a department part of an appropriation to recompense it for money expended for the state's charitable purpose. The Constitution prohibits contracts with sectarian or denominational institutions, associations, and corpora- -contract for tions, where the treatment of inbasic subject-matter digent sick-conis founded on an appropriation for charity and benevolence. Such conclusion may or may

stitutionality.

(290 Pa. 388, 139 Atl. 122.)

not prevent contracts with such institutions on other grounds or for other purposes where charity and benevolence is not the controlling purpose, yet may be remotely and indirectly concerned, where the contract is for the purchase of a specific thing, or a given commodity. All such questions are beside the point now under consideration and many reasons may suggest themselves, differentiating such suggested cases from the one before us.

Even if it be conceded that the arrangement entered into between the department and the hospital represents the purchase of a commodity, the all-important fact still remains that, by virtue of that very arrangement, and payment under the act of 1925, the sectarian institution is enabled to furnish the commodity-care of the indigent sickand it is thereby enabled to do it as a sectarian institution. It still exists as such, and, even though no profit be made, or though the compensation covers only the cost, or less, the institution is thereby, to that extent, enabled to function as a sectarian institution, and on the people's money.

As stated in the Buser Case, supra:

""The intent' and purposes of these provisions was, and therefore still is, to forbid the state from giving, either directly or indirectly'

appropriations to liquidate these expenses [for charitable and benevolent purposes] . . . through a department or agency, to denominational or sectarian institutions." Appellants urge that the Collins Case, in this respect, is not applicable. As we view it, it has a peculiar force when applied to the facts here presented. Neither the individuals on the one hand nor the Legislature on the other can set up a fictitious body to conceal the real purpose of the appropriation.

The Appropriation Act gives no right to purchase "service." The act plainly states that the appropriation is to pay for the "treatment

and maintenance of the indigent sick and injured" and the use of the term "hospital service," and the thought of service being purchased, will not serve to take away the constitutional inhibition. The term "hospital service" -constitutional rises no higher, nor limitation-hosdoes it include with- pital service. in it elements which do not go hand in hand with the performance of any charitable work, nor does it import any more sanctity than did the underlying purpose attached to direct appropriations to such institutions considered in the Collins Case prior to the act of 1923, nor such appropriations under that act nor since its passage. The making of a contract by the department, whether authorized or not, cannot aid an unconstitutional act.

The learned counsel for appellants urge with much force that Saint Agnes' Hospital is not a sectarian institution. Counsel need not be reminded of the rule, so frequently expressed, that the findings of fact of a chan- Appeal-effect of cellor, supported by findings of competent evidence, chancellor.

or drawn by inferences from such evidence, has the effect of a verdict of a jury. Glenn v. Trees, 276 Pa. 165, 167, 120 Atl. 109; Miller v. Central Trust & Sav. Co. 285 Pa. 472, 476, 132 Atl. 579. Under this rule, after carefully considering the evidence, we must sustain the findings of the chancellor. It would serve no useful purpose to discuss the separate findings in detail.

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ANNOTATION.

Contract to pay for services or reimburse expenditures as within constitutional inhibition of aid to sectarian institutions.

[Public Moneys, §§ 7, 331.]

This annotation is supplementary to that in 22 A.L.R. 1319.

In accord with the authorities cited in 22 A.L.R. 1319, holding a contract between a state, county, city, or other political subdivision, and a sectarian institution, whereby the former agrees to pay the latter for services rendered or expenditures incurred thereunder, to be within the meaning of a constitutional provision inhibiting the use of public funds in aid of sectarian institutions, and accordingly void, the Pennsylvania court in the reported case (COLLINS v. MARTIN, ante, 311) takes the view that the state's paying for the treatment of the indigent sick must be classed as only a discretionary duty, and declares: "What is really done by the state as it relates to the control of expenditures is that the state reimburses the hospital for the money used by the hospital in caring for the indigent sick,

even

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In support of the rule it will be noted that the reported case (COLLINS v. MARTIN) relies upon and quotes from the decision of Collins v. Kephart (1921) 271 Pa. 428, 117 Atl. 440, which, in holding that an appropriation for a Jewish hospital offended the same constitutional inhibition, declared: "Those who adopted the restriction against appropriating money to sectarian institutions must change the rule, if desired, either through an amendment to the present Constitution or by making a new one. Neither the legislature acting alone nor the courts have power so to do." An in

teresting point brought out in that case was that similar appropriations for sectarian institutions had been unchallenged in that state for about forty years, except for occasional vetoes by governors; in this connection the court said that long persistence in the breach of the Constitution neither warranted the course pursued, nor gave it legality.

And, in refusing to limit this rule to the situation where the payment for the service exceeds its actual cost, the Pennsylvania court in the reported case (COLLINS V. MARTIN) takes the same position as did the Georgia court in Bennett v. La Grange (1922) 153 Ga. 428, 22 A.L.R. 1312, 112 S. E. 482, to which the earlier annotation was appended, and is at variance with the Illinois doctrine limiting the rule, as indicated by cases cited in the previous annotation at pages 1321 and 1322.

The rule as laid down in Bennett v. La Grange (Ga.) supra, was applied in Richter v. Savannah (1925) 160 Ga. 178, 127 S. E. 739, so as to render void an appropriation to reimburse a Catholic hospital for maintenance and medicines furnished to poor patients.

Although possibly beyond the scope of the present annotation, attention is called to Southwestern Presby. University v. Clarksville (1924) 149 Tenn. 256, 259 S. W. 550, where the court, construing a city's contract with a. university, under which it transferred bonds to the institution in consideration that a certain number of students from the city should have free tuition therein, said that a presumption arose that the city's disposition of public funds was intended as a "payment or exchange for value rather than a gift," and that this was especially true if the other party was "a sectarian organization, to which otherwise its lawful right to contribute would be questionable."

But in distinguishing Williams v. Stanton Common School Dist. (1917)

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