Craig v. Mercy Hospital-Street Memorial

McGehee, C. J.

Upon the advice of the Attorney General, based upon an interpretation of the meaning of Section 66 of the Mississippi Constitution of 1890, as applied to the question at issue, the appellant, Carl N. Craig, as State Auditor of Public Accounts, refused to honor and pay a requisition of the Mississippi Commission on Hospital Care, for a warrant on the State Treasury, in favor of the appellee, Mercy Hospital — Street Memorial, of Vicksburg, Mississippi, and representing a part of a large grant of money which had been approved by such Commission in favor of the said hospital in the total sum of $214,000 from state funds, to be supplemented to the extent of $527,000 from federal funds to be paid to the hospital through the Commission, as per contract between them in connection with the long range statewide hospital plan to assist in the construction, erection, and equipping of hospitals, nurses’ homes, health centers, clinics, and related facilities, that are publicly owned, operated, and controlled, or where the same are privately owned, op*432erated, and controlled on a strictly nonprofit basis, as defined by the Commission, and as provided by law.

...Thereupon, the .appellee, Mercy Hospital — Street Memorial, filed its petition for a writ of mandamus to compel the issuance of the warrant as aforesaid. To this petition the appellant, as such State Auditor, and represented by the Attorney General, filed an answer .to the suit for mandamus on two defense grounds, (1) That the hospital involved is not eligible to receive such grant from the state appropriation of $4,750,000, made by Chapter 164, Laws of 1948, and from the federal funds allocated to-the state, for the reason that the hospital corporation is not owned, operated, and controlled on a strictly nonprofit basis, within the meaning of Chapter 430, Laws of 1948, which is amendatory of Chapter 363, Laws of 1946, and the Act of Congress, 42 U. S. C. A. Section 291 et seq., which was enacted “to assist the several states.to construct public and non-profit hospitals ’ and appropriated $300,000,000 of federal funds for such purpose.

.(2) .That the grant of the funds in question is a donation or gratuity for a sectarian purpose or use, and is therefore in violation of said Section 66 of the State Constitution, which reads as follows: “No law granting a donation or gratuity in favor of any person or object shall be enacted except by the concurrence of two thirds of the members elect of each branch of the legislature, nor by any vote for a sectarian purpose or use. ”

As to the first ground of defense above stated, a nonprofit,hospital is defined in both the said Act of Congress and Chapter 430, Laws of 1948, as “ [any hospital] owned and operated by a corporation or association no part of the net earnings of which inures, or may lawfully inure, to the benefit of any private shareholder, group, or individual. ”

The Mississippi Commission on Hospital Care found and adjudicated by resolution duly adopted that the appellee hospital comes within the definition of a nonprofit hospital, as above defined, and that said hospital *433had agreed to the terms and conditions imposed by the said Act of the State Legislature of 1948, the material provisions of which were set forth in the contract executed and submitted by the hospital to the Commission so as to entitle it to the grant of funds in question as a part of the long-range state-wide hospital program contemplated by Chapter 363, Laws of 1946, as amended by the said Chapter 430, Laws of 1948.

As a consideration for the so-called “grant” of the funds in question, the appellee hospital obligated itself to maintain at least 10% of its bed capacity if needed for charity patients as provided for in the said Acts of the Legislature. It also agreed and contracted with the Commission, as provided for in said Chapter 430, Laws of 1948, that if, at any time within twenty years after the date of such grant, the hospital shall cease to be a nonprofit institution, or shall otherwise fail to meet the requirements of the Act, a lien in favor of the State shall attach to the property of the hospital, and that the State shall be entitled to recover the amount of money advanced by it to such institution, less reasonable depreciation as determined by agreement of the parties or the chancery court of the county in which such hospital or facility is located. It further covenanted and agreed that the hospital will be maintained as a privately owned nonprofit hospital and operated with a purpose of providing maximum hospital facilities to the citizenship of the State at minimum cost to the patient, as required by the statute authorizing such a grant of aid; and that said hospital and all of its facilities “shall be available at all times as a part of the state-wide hospital program sponsored by the Commission and as a part of the state-wide teaching facilities for medical technicians, nurses, medical students, internes, and resident physicians and such other medical educational needs as the Commission may determine to be necessary or desirable; . . .”. (Italics ours.) And the following is expressly admitted by the answer of the defendant in this case and it therefore *434stands as a fact: “As a specific consideration for obtaining said funds Petitioner lias entered into and executed a formal covenant and agreement with the said Commission on Hospital Care insuring said Commission of definite required facilities and of certain controls and services in return for the money to be made available to the Petitioner.”

It will therefore be seen that while the statutes in question refer to the allocation of the funds as being a “grant”, the express provision of the statues fully discloses that the allocation of funds is not to be made as a grant in the sense of being a gift. In fact a grant of personal property is defined in Black’s Law Dictionary, Second Edition, 547, as “a method of transferring personal property, distinguished from a gift by being always founded on some consideration or equivalent. 2 Bl. Com. 440, 441.” And as applied to real estate, a grant is a generic term applicable to all transfers of such property, whether with or without consideration.

The record is silent as to any finding by the Mississippi Commission on Hospital Care on the issue as to whether or not the appellee, Mercy Hospital — Street Memorial, had applied for the grant for a sectarian purpose or use, within the meaning of said Section 66 of the State Constitution. Assuming that there was no donation or gratuity involved, in view of the consideration to be received by the State in return for the so-called grant under the terms of the contract hereinbefore mentioned, there would have been no need for a finding* by the Oommission that the funds were not being sought for a sectarian purpose or use, the Constitutional provision in question only prohibiting a “donation or gratuity” for such a purpose or use. However, the circuit court which heard the cause on both oral and documentary evidence without the intervention of a jury, not only sustained the findings of the Commission on Hospital Care to the effect that the appellee is a nonprofit hospital, no part of the net earnings of which inures, or may lawfully inure, to *435the benefit of any private shareholder, group, or individual, but the court further found from the proof that the grant was neither a donation nor gratuity, and that it was not for a sectarian purpose or use. The court therefore ordered the writ of mandamus to be issued as prayed for and granted this appeal from its said judgment with supersedeas.

To support the finding of the Commission and the trial court, the proof discloses (and there is no conflict in any of the evidence in the record before us) that the appellee hospital was originally incorporated as the Vicksburg Sanitarium on April 13, 1903, for a period of 50 years. The founder thereof, Dr. D. P. Street, personally guaranteed to the stockholders an 8% dividend upon their investment and he continued to pay the same until about the year 1921 or 1922, when he notified the stockholders that he would be unable to continue paying a dividend and at the same time improve and maintain the facilities of the hospital. He thereupon refunded to the stockholders their investment and took up the stock. Eventually this stock came to be owned by his brothers, Drs. George M. and Augustus Street, but no dividends or other payments in the nature of profits of any kind have been paid to the stockholders since the year 1921 or 1922. On the contrary, all of the net earnings of the hospital have been invested since that time in the development and improvement of its facilities and physical properties.

The corporation, known as the Vicksburg Sanitarium, amended its charter during the year 1935 so that it would contain, among other provisions, the following: “Provided, however, that all of the income and revenue derived from the hospital or sanitarium, and nurses’ school and home, shall be used and devoted exclusively to and for the purposes of said hospital or sanitarium and nurses’ home, and no part of the same for profit; and no dividends shall be declared or paid to the stockholders; and that said corporation, as now and heretofore may *436maintain in said hospital or sanitarium, one or more charity wards that are for charity patients.”

On July 7,1943, all the corporate stock of the Vicksburg Sanitarium, aggregating 500 shares of the par value of $100 each, was acquired for the sum of $50,000, the face value thereof, by the Sisters of Mercy of Vicksburg, a corporation which was organized and chartered on November 7, 1861, under the laws of this State. The corporate members of the latter corporation are individually members of the Order, Sisters of Mercy, all of whom are of the Catholic faith.

After the acquisition of the corporate stock of the Vicksburg Sanitarium, the charter thereof was amended on August 5, 1943, so as to change the name to Mercy Hospital — Street Memorial, for the reason that the Vicksburg Sanitarium was originally founded by Dr. D. P. Street, as aforesaid, and 499 shares of the corporate stock thereof were owned in 1943 by Drs. George M. and Augustus Street when the hospital was sold in 1943 by the transfer of such stock for a small per cent of its then value, after the Drs. Street had rendered distinguished services therein to suffering humanity for nearly 40 years; and for the further reason that the Drs. Street were continuing to devote their best efforts to the success of the hospital under its new management, in which .they were to play and are still playing a most important part. The Drs. Street are members of the Protestant faith.

The sale to the Sisters of Mercy of Vicksburg in 1943, including the land, buildings, and equipment of the hospital, was accompanied merely by the assignment of the corporate stock, and the present holders thereof are the 7 members of the corporation, Sisters of Mercy of Vicksburg, and their successors, who each have an equal vote and interest with the other in regard thereto.

The hospital has been granted tax exemption as a nonprofit hospital for a number of years.

The resolution adopted by the Commission on Hospital Care, which approved the grant to the appellee hospital, *437recites: “The hospital to be so constructed will be a nonprofit institution owned and operated by a corporation, no part of the earnings of which inures, or may lawfully inure, to the benefit of any private group or individual; that said corporation is now engaged in the operation of a hospital which is a non-profit institution of the character described . . .”.

In the instant case, if we consider a gain or increase in the capital assets as a profit, the corporate charter of Mercy Hospital — Street Memorial would prohibit such profit or gain from ever being distributed to any shareholder, group, or individual.

While dividends and profits are not synonymous, the former being paid out of the latter, the fact remains that no part of the net earnings of this hospital have inured to anyone, but the earnings have been used for the enlargement and • improvement of the physical properties and other facilities, and with the necessary result of course that the corporate stock has greatly enhanced in value and to the extent that the land, buildings, and other equipment and other assets are now worth at least from one-fourtli to one-half million dollars. However, it is contemplated that under the contract between the hospital and the Mississippi Commission on Hospital Care, all of the assets of the hospital are to go into the new hospital building to be constructed from state and federal funds; that is to say, all of the assets of the hospital corporation, or the proceeds of any sale thereof, are to go into the cost of the new hospital, and no benefit therefrom is to accrue to the stockholders.

But it is argued that the appellee hospital is not a nonprofit institution because it has outstanding stock in the hands of shareholders who would ordinarily be entitled to those assets upon the expiration of its charter in 1953, or upon its dissolution at any future time. But it may be observed that the same result would follow if the hospital was a nonstock corporation. Woodville Lodge v. Poole, 190 Miss. 798, 1 So. 2d 780. At any rate, in the statute *438providing for the grant of the funds in question, the condition is that if net earnings do not inure, or may not lawfully inure, to the benefit of any shareholder, the hospital may qualify as a. nonprofit hospital. The statute does not require that the hospital shall be of such character that, no part of its capital assets may inure to its shareholders upon dissolution. Net earnings is the income over expenditures. It is in contradistinction to corporate property and capital assets. Then, too, a nonprofit hospital now has a well-defined meaning under the decisions of this court in regard to tax exemption and a number of them have been held to be such and entitled to exemption from taxation under statutes which are to be strictly construed against the applicant for such tax exemption. Those decisions are persuasive only, and we recognize that it remains for the determination of the Commission on Hospital Care, subject to review by the Courts, as to whether or not an applicant for a grant is in truth and in fact a nonprofit hospital within the meaning of the Act of Congress and Chapter 430, Laws of 1948. But if it should he held that no hospital corporation in the state which has outstanding capital stock, and the capital assets of which are being enhanced in value by its income being devoted to permanent improvements, can qualify for a grant under Chapter 430, Laws of 1948, then it would be difficult to conceive how the state could use any of the privately owned existing hospital facilities in the state in carrying out its statewide hospital program, since the statute requires that all privately owned hospitals must he nonprofit institutions to he eligible for the grant of state and federal funds. Moreover, Chapter 430, Laws of 1948, presupposes that there may be outstanding stock in the nonprofit hospital, and that there may he earnings by the hospital above its expenses of operation, since the Act defines such a hospital as being one “no part of the net earnings of which inures, or may lawfully inure, to the benefit of any private shareholder, group or individual. ’ ’

*439Assuming that the appellee hospital is qualified as a nonprofit institution, as found by the Commission on Hospital Care and by the trial court as an issue of fact, we have left for decision the second ground of defense of whether or not the grant of funds is a donation or gratuity for a sectarian purpose or use in violation of Section 66 of the State Constitution. If there is no “donation or gratuity” involved in the instant case, then Section 66 has no application at all. That is to say, unless there is a donation or gratuity, the problem as to whether or not the grant is “for a sectarian purpose or use” does not arise.

Our Constitution does not say “no appropriation”, or “no public funds”, or “no money of the state” may be used “for a sectarian purpose or use”, but the provision is that no “donation or gratuity” shall be made for such purpose. Nor does our Constitution prohibit a grant being made to any “sectarian institution”, as do the constitutions of many other states. Even so, the grant here involved is not to the Sisters of Mercy of Vicksburg, as aforesaid, but to the appellee hospital corporation, engaged in operating a general hospital on a nonsectarian basis. However, money may be handled by a “ sectarian institution” and still not be devoted to a “ sectarian purpose or use”. Administering to the sick is not sectarian; it is done by governmental and secular agencies.

Moreover, the term “donation or gratuity” implies absence of consideration, the transfer of money or other things of value from the owner to another without any consideration. In Bouvier’s Law Dictionary, a donation is defined to be the act by which the owner of money or other things voluntarily transfers the title and possession thereof without any consideration in return. Georgia Penitentiary Co. v. Nelms, 65 Ga. 499, 504, 38 Am. Rep. 793; Indiana N. & S. Railway Co. v. City of Attica, 56 Ind. 476, 486; Roche v. Roanoke Classical Seminary, 56 Ind. 198, 202; State ex rel. Western Construction Co. v. Board of Com’rs. of Clinton County, 166 *440Ind. 162, 76 N. E. 986, 994, citing Bouvier’s Law Dictionary; Webster’s Dictionary, and Encyclopaedic Dictionary. To tbe same effect are the cases of Trustees of Rutgers College v. Morgan, 71 N. J. L. 663, 60 A. 205; Chouteau v. City of St. Louis, 331 Mo. 1206, 56 S. W. 2d 1050, and Forsyth v. Reynolds, 15 How. 358, 56 U. S. 358, 14 L. Ed. 729.

Webster defines a gratuity as being: “Given freely, without recompense, or regardless of merit. Not called for by the circumstances; unwarranted. Not involving a return, compensation, or consideration, as in gratuitous contract, one solely for the benefit of one of the parties.”

It may be conceded that words are variously defined in both legal and standard dictionaries and elsewhere, but the fact remains that the foregoing definitions are in accord with the common acceptation of the meaning of the term “donation or gratuity”. When Section 66 of our Constitution was adopted in 1890, all of the people —Protestants, Catholics, Jews, and those of no religious affiliation at all — met on a common level, through their chosen delegates in the convention, and agreed on the precise limitation which should be placed upon the legislative power in regard to granting funds for a sectarian purpose or use, and they declared that “no law granting a donation or gratnffy . . . shall be enacted . . . ” for such a purpose or use. It is to be assumed that the words of this brief constitutional provision on such an all-important question were chosen advisedly, and expressed the full measure of the convention’s determination and concern in that behalf. It would have been an easy matter to have provided therein that no money of the state should ever be used, or authorized by the Legislature to be expended, for such a purpose or use, but the convention chose to prohibit only a “donation or gratuity” therefor.

In Cooley’s Const. Lim. 54 it is said: “The object of construction, as applied to a written constitution is to give effect to the intent of the people when adopting it.” *441However, this eminent author says that when one is plainly declared in the instrument itself, the courts are not at liberty to search elsewhere for “possible, or even probable, meanings . . . ” But the dissenting view in the case at bar is that because the Legislature used the word “grant” in Chapter 430, Laws of 1948, we should substitute the word “donation” as being synonymous therewith. In fact, there is no possible way to make applicable Section 66 of our Constitution to the case before us without giving the word “donation” in this constitutional provision the identical'meaning of the word “grant” as used in the said Act of the Legislature. If we should undertake to do this, we are confronted with the difficulty that only one meaning can be ascribed to the word “donation” — a transfer of the property from the owner to another without any consideration in return — -whereas a grant is “a method of transferring personal property, distinguished from a gift by being always founded on some consideration or equivalent. 2nd Bl. Comm. 440, 441 ’ ’, and when applied to real estate it is applicable to transfers of such property, whether with or without consideration as hereinbefore shown.

The words “grant and convey” are familiar expressions in deeds executed for a valuable consideration. The substitution of the word “donate” in a conveyance would be generally understood to mean that the conveyance was intended to be without consideration. We are therefore of the opinion that a donation and a grant are not synonymous, as used in our Constitution and the statute in question.

However, we are relieved of the difficulty in the instant case as to whether the use of the word “grant” in the statute in question was used in the sense of a donation, for the reason that the statute by its plain provisions has clearly disclosed that the so-called “grant” of funds therein mentioned were for valuable considerations in return, and therefore in no sense a donation. But there is an early case from Texas, Fisk v. Flores, decided in *4421875 as reported in 43 Tex. 340, where the Court, after recognizing that a donation, as defined by the civil law “is a contract whereby a person gratuitously dispossesses himself of something by transferring it to another, . . .”, and that a “donation inter vivos is an act by which one gives to another irrevocably and gratuitously some property of which he becomes the immediate owner”, proceeds to state that “it is entirely consistent with the nature of a title by ‘donation’ that the donor may be moved by reason of services rendered (in the past) by the donee to make the donation, and (the fact) that it is induced by such consideration does not take from the transaction the character of a ‘donation’ ”. The point at issue was whether or not the transfer of property under such circumstances from the husband to the wife became a part of the community estate so as to prevent the husband from disposing of the same. We do not think that this decision is controlling on the issue of whether or not the funds allocated by the Commission on Hospital Care to the appellee hospital in consideration of the benefits and services to be received in return, would constitute a donation. The foregoing expression as to what constitutes a donation is not in harmony with the common understanding of the meaning of a donation in either a popular or legal sense. A grant and donation are synonymous only when the former is without consideration, and such is not in our opinion the sense in which the term was used in the statute now under consideration.

A decision of affirmance herein might well rest alone upon the two grounds: (1) that we are not justified in reversing the trial court and the finding of the Commission on Hospital Care on the issue of fact, based on undisputed evidence, that the appellee, Mercy Hospital— Street Memorial, is a nonprofit hospital within the definition of the said Act of Congress and the said statute in question, and (2) that the payment of the funds in question by the Commission on Hospital Care to the said hospital for the considerations contracted for, is not eith*443er a donation or gratuity. However, in view of the fact that the dissenting view to an affirmance of the case is predicated upon three grounds, (1) that the appellee is not a nonprofit hospital, (2)' that the granting of the funds applied for hy it would amount to a donation, and (3) that the funds are to be used for a sectarian purpose or use, we deem it proper to also state what we deem to be the facts on the question of whether or not the funds are to be used for a sectarian purpose or use, and we do so at the expense of employing the use of mere dicta in the completion of this opinion.

Por the purpose of stating our views, it may be conceded that the corporation, Sisters of Mercy of Vicksburg, and the appellee, Mercy Hospital — Street Memorial, are both sectarian institutions, and such is the opinion of the three judges who are concurring in this decision, the same as it is of those dissenting hereto, for the reason that the corporate stock of the latter is owned by the former corporation, which is admittedly sectarian. The concurring judges do not concede, however, that the grant is for a sectarian purpose or use, and particularly within the meaning of Section 66 of our Constitution. The operation of a hospital may be for a charitable, benevolent, and philanthropic purpose without being operated for a sectarian purpose.

The appellee, Mercy Hospital — Street Memorial, the incorporators of which were mostly, if not altogether, Protestants, obtained the right under the charter of the Vicksburg Sanitarium to establish only a sanitarium for the treatment of the sick and injured and a school and home for nurses, with no authority expressed therein for teaching any particular religious beliefs, and which hospital was admittedly operated on a nonsectarian basis from 1903 until 1943, and since its incorporation no change has been made in its charter up to the present time so as to enlarge these charter powers — the only changes made since 1903 in the charter being those made in 1935 to prohibit any of the earnings of the hospital *444from being paid out as dividends or profit to the shareholders, and the change of the name from Vicksburg Sanitarium to Mercy Hospital — Street Memorial in honor of its Protestant founders.

Even though in 1943 the corporate stock of this hospital, which was chartered 42 years after the charter was granted to the corporation, Sisters of Mercy of Vicksburg, is now owned by the latter corporation, it has been definitely agreed as a part of the contract with the Commission on Hospital Care that the appellee hospital is now operated as a nonsectarian hospital, its bylaws adopted to that effect having been submitted as a part of the application for the fund in question, and as a part thereof, and presumably the contract executed by the appellee Mercy Hospital- — Street Memorial with the Commission is to be carried out in good faith.

All matters of policy and the management of the appellee hospital are vested in a Hospital Adminstrative Board, selected without regard to religious affiliation. The bylaws of the Mercy Hospital — Street Memorial contain, among other provisions, the following: “Article I, Section 2: This Company shall in all respects be conducted as a non-profit, non-sectarian community service institution. No part of the net earnings of this hospital shall inure to the benefit of any private member, stockholder, group or individual.”

Article IX, Section 2, of the bylaws of the hospital, provides: “The Board of Directors shall name a Hospital Administrative Board of ten members who shall elect a chairman from their number.

“The Hospital Administrative Board shall be selected so as to insure that said hospital shall be a community hospital and the members thereof shall be determined without regard to denomination or creed.” (Italics ours.)

Article III, Section 9, of the bylaws of the appellee hospital expressly requires that the Board of Directors shall delegate to the Hospital Administrative Board the *445management and policies of the corporation in the operation of its affairs; they retain the right to veto the action of said Administrative Board only in the matter of the “disposal, pledging, or hypothecation” of any of the property or funds of the hospital.

The Board of Directors, which is composed of not less than five of the corporate members of “The Sisters of Mercy of .Vicksburg” name three members of the Hospital Administrative Board, who may be Sisters, but who are not required to be. The medical staff of the appellee hospital, composed of twenty-one doctors who at this time happen to all be members of the Protestant faith, name three members of the Hospital Administrative Board, who may be, but are not required to be, physicians. The six members of said Board so named get together and name three lay people of any religious denomination to make out the nine members of the Board, who name another person as chairman thereof. It so happens that at the present time the Hospital Administrative Board is composed of five Catholics and five Protestants. Vicksburg is a Catholic center in this state. The appellee Mercy Hospital; — Street Memorial, is open to the public of all races, creeds and faiths as well as to those who profess no religious belief. Religion is not taught in the hospital nor are there any Bibles, or other religious books or literature distributed therein. Crucifixes are in the hospital rooms, but since a crucifix is a cross bearing an effigy of Christ crucified — a Christian emblem — its use is not confined to one church alone. Its presence could neither cause a Protestant or Jew to embrace the Catholic faith, nor could its absence cause a Catholic to relinquish his beliefs in favor of the Protestant or Jewish religion. No patient would likely stay so long.

Each minister of the Gospel in Vicksburg, whether Protestant, Catholic, or Jew, is notified daily by the hospital authorities of the arrival of any patient of his *446particular faith, and a welcome is extended for them to visit those patients if they are physically able to receive visitors.

The business manager of the hospital belongs to the Christian Church. Graduate and student nurses are accepted without regard to religious affiliation. Out of the number of approximately 75 students and graduate nurses (most of whom are Protestants and required to attend their own church at least once a month) only two or three of the nurses are Sisters, wearing uniforms of the Sisterhood. There are only eight Sister nurses in all at the hospital, one of whom is an administrator of the hospital, another of whom has charge of the dietary and food services, and the third of whom is in charge of the hospital’s bookkeeping department. These eight Sisters receive for their services only the total sum of $1,500 per month for the eight of them, a sum barely sufficient to meet their actual necessities, although the three executives specifically mentioned above are filling positions which would ordinarily command a salary of from $5;000 to $8,000 per annum.

The conduct of the hospital does not differ in any respect from that of any other general hospital of comparable size and similarly located for carrying on the work of administering to the sick.

No part of the physical properties or other assets of the hospital corporation has been accumulated by the contribution of any funds from the Catholic Church or any other church, or from the Sisters of Mercy of Vicksburg; nor do any of the earnings of the hospital go into the treasury of the Catholic Church or any other church, or into the treasury of the Sisters of Mercy of Vicksburg, Incorporated. It should be kept in mind that the corporation, Sisters of Mercy of Vicksburg, is not a party to this suit, and has -neither applied for nor been granted any funds by the Commission on Hospital Care.

Section 86 of the Mississippi Constitution of 1890 contemplates, among other things, that “the legislature *447may provide for the care of the indigent sick in the hospitals in the state. ’ ’ If this obligation of the Legislature, though not a mandatory duty, is to be discharged, it must be done through some agency equipped to render such service, and this constitutional provision contemplates that it may be done in the hospitals in (not necessarily of) the state. The federal appropriation in -which all states may share has brought about a situation where it has become a duty and a public function that the Legislature shall provide for the care of the indigent sick in justice to them, and secondarily in recognition of our state’s right to share in the federal funds.

If there be apprehension that when the charter of the Mercy Hospital — Street Memorial shall expire on April 13, 1953, the owners of the corporate stock therein may fail to have the charter renewed and allow it to lapse so that upon dissolution the stockholders may claim the capital assets, including the new building and equipment, as their own, or for the Catholic Church, notwithstanding that the assets belong to the Corporation, Sisters of Mercy, to which the stock was sold by the Drs. Street, and also claim the right to operate the hospital, or dispose of the same, in disregard of the contractual agreement of the Mercy Hospital — Street Memorial with the Commission, and that they will assert their right to do so as individual shareholders, or that the Sisters of Mercy, Incorporated, will undertake to do so, freed of any obligation to carry out the solemn contract with the state to render the services hereinbefore mentioned, such apprehension may be dispelled by the fact that under the contract with the Commission, and Chapter 430, Laws of 1948, a lien would immediately attach in favor of the state for the funds advanced under this grant, for failure to continue to operate the hospital as a nonprofit institution for 20 years and render the services to the state as contemplated.

Moreover, such a scheme to obtain the grant with the purpose of breaching the contract and getting a new *448hospital for private gain at great expense to the state and federal government, to claim as their own by repudiating the bylaws hereinbefore quoted, and which were submitted as part of the hospital’s application to the Commission on Hospital Care, would amount to a monumental fraud upon the Commission and the state and federal governments, such as is not to be presumed. On the contrary, good faith is to be presumed, and not fraud. Any fear that the present members of the Sisters of Mercy, or their successors, as owners of the corporate stock would do otherwise than operate the hospital for the next 20 years as a nonprofit institution and render the services to the state as contracted for, and without regard to religious affiliations, race or creed of the patients, would be inconsistent with the honorable record of sacrificial service rendered by them to the sick in the past, without the slightest taint or suspicion of greed and avarice.

As to what may happen beyond the 20 years’ period of service contracted for, it is contemplated that a long-range hospital program for such a period will enable the state to get value received in the performance of a service by the hos'pital to the indigent sick and from the other benefits contracted for, in fulfillment of the state’s constitutional authority and governmental function; and that this will furnish a valuable consideration in return for the grant and prevent it from being a donation or gratuity.

In 59 C. J. Section 342, p. 203, the general law is stated: “A constitutional limitation, express or implied, on gifts of public money does not generally apply to a disbursement, appropriation, or other fiscal statute for a public purpose to carry out a function of the government or to discharge the obligation of the state, although only a moral or equitable obligation.”

In Craig, State Auditor v. North Mississippi Community Hospital, 206 Miss. 11, 39 So. (2d) 523, 528, *449this Court said: “The law (Chapter 430, Laws 1948) now under attack is clearly a statute which does bear a reasonable relation to a governmental purpose as expressed in Section 86 of the Mississippi Constitution of 1890.” And the Court further said: “If the end be public, it matters not that it is attained through a private channel”, provided, of course, that as in the case at bar the grant is not a “donation or gratuity” for a “sectarian purpose or use”.

In its petition for mandamus the North Mississippi Community Hospital described itself as a “non-profit, nonsectarian corporation”, which was admitted by the demurrer.

The Court, following the petitioner’s own description of itself in that ease, held that “the legislature has the authority to appropriate public funds out of the state treasury for the care of the indigent sick in the nonprofit, nonsectarian hospitals in this state in accordance with the above quoted Section 86 of the Constitution, particularly where the expenditure of such funds for such purposes is under the supervision and control of a state agency.” In other words, the decision was limited to the case then before the Court wherein it was admitted that the hospital involved in that case was nonprofit, and nonsectarian. There was no attempt to infer what the future might hold for any other hospital. No sectarian problem was there involved, since the institution was admitted to be nonsectarian, and the question of whether or not the grant in that case was a “donation or gratuity” for a “sectarian purpose or use” under Section 66 of the Constitution did not arise for the consideration and decision of the court in that case, it being admitted by the demurrer that the grant of funds was not for a sectarian purpose or use, as hereinbefore stated.

It is of interest, however, that in the recent case of Bedford County Hospital v. Browning, 225 S. W. (2d) *45041, 43, decided on December 17, 1949, though not involving an alleged sectarian purpose, the Supreme Court of Tennessee held, in regard to a grant to be supplemented by such federal funds in aid of a hospital, that: “This grant does not constitute a gratuity or donation of State credit, as under the terms of the Act itself this constitutes a performance of public duties and with no right to reap individual profit. ’ ’ In other words, the Court did not think a “grant” or funds under a state statute and the Act of Congress supplementing the same as in the instant case, was the same as a “donation or gratuity” of state credit. We cite this case only on the point that a grant is not necessarily a donation or gratuity. The Tennessee statute called the state’s contribution of funds to its hospital program a “grant”, but the Court held that such was not a gratuity or donation.

Also, on May 20, 1949, the Supreme Court of Kentucky, in the case of Kentucky Building Commission v. Effron, 310 Ky. 355, 220 S. W. (2d) 836, 838, when construing Section 5 of their Constitution which provides that, “No preference shall ever be given by law to any religious sect, society or denomination; nor to any particular creed, mode of worship or system of ecclesiastical polity”, and where one of the hospitals was controlled and governed by Episcopalians and the other by Catholics,, held as follows: “It is well settled that a private agency may be utilized as the pipeline through which a public expenditure is made, the test being not who receives the money, but the character or the use for which it is expended. 51 Am. Jur., Section 390, p. 381; Hager v. Kentucky Children’s Home Society, 119 Ky. 235, 83 S. W. 605, 67 L. R. A. 815; Orphan Society of Lexington v. Fayette County, 6 Bush 413, 69 Ky. 413; Robinson v. Mercer Fiscal Court, 218 Ky. 452, 291 S. W. 721.” (Italics ours.)

In this Kentucky case there was involved a grant to certain hospitals, and one of them, ‘ ‘ Our Lady of Peace ’ ’, *451was controlled and governed by a board whose members were of the Catholic faith, and the court further said: ‘ ‘But the hospitals are open to the public of all creeds and faiths- — and even to those who profess no certain religious belief. Religion is not taught in these hospitals nor is any one sect given preference over another. The fact that members of the governing boards of these hospitals, which perform a recognized public service to all people regardless of faith or creed, are all of one religious faith does not signify that the money allotted the hospitals is to aid their particular denomination. On the contrary, the governing boards of such hospitals are but the channels through which the funds flow. Courts will look at the use to which these funds are put rather than the conduits through which they run. If that use is a public one and is calculated to aid-all people in the State, it will not be held in contravention of Section 5 merely because the hospitals carry the name or are governed by the members of a particular faith. 51 Am. Jur., Section 349, p. 393.”

Now, referring to the cases relied upon by the Attorney General in the case at bar, the purport of which may seem to be in conflict with what has been above stated, it will be found that the section of the state constitution involved in the case of State ex rel. Nevada Orphan Asylum v. Hallock, 16 Nev. 373, reads as follows: “No public funds of any kind or character whatever, state, county, or municipal, shall be used for sectarian purposes”, article 11, Section 10, whereas Section 66 of our Constitution provides that: “No law granting a donation or gratuity . . . shall be enacted . . . for a sectarian purpose or use.” The two provisions are vastly different. Nevada says “No public funds of any kind or character . . ., shall be used for sectarian purposes”, whereas Mississippi says no “donation or gratuity” shall be made for such a purpose. Our Constitution leaves the Legislature free to make a grant for a valuable consideration in return, whereas Nevada pre*452vents such, a grant without regard to what may be received in return.

The provision of the Constitution of South Dakota, article 6, Section 3, involved in the case of Synod of Dakota v. State, 2 S. D. 366, 50 N. W. 632, 633, 14 L. R. A. 418, reads: “No money or property of the state shall be given or appropriated for the benefit of any sectarian or religious society or institution,” whereas Mississippi only forbids a donation or a gratuity for such purpose. In the South Dakota case the institution to which the appropriation was made was chartered and organized “to maintain and promulgate the doctrines and belief of the Christian religion, and of the sect known as ‘Presbyterians.’ ” The grant was held to be in violation of the constitution on the ground that the State is not only prohibited' from giving or donating said funds, but from appropriating them at all. The decision hung on the words “or appropriated”. No donation was claimed, a consideration in return was involved, but the Court said that under the above constitutional provision “the state is not only prohibited from giving or donating state funds, but from appropriating them.”

The provision of the Georgia Constitution 1877, art. 1, Section 1, par. 14, involved in Bennett v. LaGrange, 153 Ga. 428, 112 S. E. 482, 22 A. L. R. 1312, reads: “No money shall ever be taken from the public Treasury directly or indirectly, in aid of any church, sect, or . . . religionists, or of any sectarian institution”. In other words, Georgia says “No money shall ever be taken from the public Treasury ... in aid of . . . any church, . . . or of any sectarian institution”, whereas Mississippi says no “donation or gratuity” shall be made for a sectarian purpose or use. Therefore, in the Georgia case a contract with the Salvation Army, a sectarian institution, to care for the poor of the City of LaGrange, violated the constitution; that is to say, the fact that the city received a consideration, or whether *453there was a donation or gratuity involved, was immaterial. The money may have been “in aid of” the Salvation Army, although clearly not a donation, and therefore in violation of the very terms of the foregoing constitutional provisions of Georgia, as the Court held. A bank may render great aid to an individual or corporation by a loan of money, but it is not, or at least not intended as, a donation.

The LaGrange case was followed in Richter v. City of Savannah, 160 Ga. 178, 127 S. E. 739, and the same distinctions were applicable, with the addition that the hospital was operated under a rule and regulation providing: “This institution is incorporated and owned by the Sisters of Mercy, and it is intended to be operated from the standpoint of a religious order.” The very opposite facts exist in the present case, where the bylaws of the Mercy Hospital — Street Memorial expressly declare: “Article I. Sec. 2: This company shall in all respects be conducted as a non-profit, non-sectarian community service institution.”

The provision of the Illinois Constitution before the Court in Cook County v. Chicago Industrial School, 125 Ill. 540, 18 N. E. 183, 197, 1 L. R. A. 437, 8 Am. St. Rep. 386, reads: “Neither the general assembly ... or other public corporation, shall ever make any appropriation or pay from any public fund whatever, anything in aid of any church or sectarian purpose . . .; nor shall any grant or donation of land, money, or other personal property ever be made by the state or any such public corporation, to any church, or for any sectarian purpose.” Smith-Hurd Stats. Const. art. 8, Section 3.

The difference between this provision and Section 66 of our Constitution will be readily seen. In that case there was public money paid to a sectarian institution for a consideration, the tuition and maintenance of indigent girls, and the Court could not have found that the appropriation was in violation of the latter part of *454such constitutional provision, for the reason that it was not a "donation or gratuity”. But the Court did necessarily find that the language of the first portion of said constitutional provision was violated, even though the money paid was for services rendered, and, therefore, not a donation. This was because "any appropriations” in aid of any church or sectarian purpose, whether for a consideration in return or not, is thereby prohibited. The Court there said: "The constitution declares against the use of public funds to aid sectarian schools, independently of the question whether there is or is not a consideration furnished in return for the funds so used”. Ours declares against a donation or gratuity only, and therefore is inapplicable otherwise.

But the strongest case relied upon by the Attorney General is that of Collins v. Kephart, State Treasurer, et al., 271 Pa. 428, 117 A. 440, 442, which involved a provision in the Constitution of Pennsylvania, which reads : "No appropriations, except for pensions or gratuities for military services, shall be made for charitable, educational or benevolent purposes, to any person or community, nor to any denominational or sectarian institution, corporation or association”. P. S. Const, art. 3, Section 18. (Italics ours.) While the principles announced by the Court in that case, and the strong argument for the complete separation of church and state, are very persuasive as to the intent of such constitutional provisions, as forbidding the state from giving any recognition, even in the fields of public charity and education, we are of the opinion that since the Pennsylvania Court in writing its opinion had before it five suits in equity to restrain the payment of moneys appropriated directly to denominational sectarian institutions, in each instance, without requiring any consideration in return (which would be material and controlling in the present case under all the facts), the decision turned on the point set forth by the Court in its opinion when it said: "It will be noted the Constitution does not say *455merely that no appropriation shall be made for sectarian or denominational purposes, nor does it confine the limitation against state aid to these institutions which actually teach sectarian doctrines or promote denominational interest. What it provides is that ‘no appropriation shall be made to any denominational or sectarian institution.’ (Italics ours.) These words, when taken at their face value, are most comprehensive in scope.”

Pennsylvania would not look to the purpose or use to which state aid was put, but only to the nature of the institution. The state was prohibited from using a sectarian institution as a medium for the performance of governmental duty. In Mississippi, such is not the case. Moreover, it is not shown that the Mercy PIospital- — Street Memorial, although a sectarian institution in that its corporate stock is owned by a sectarian corporation intends to use the funds in question for a sectarian purpose or use. The new hospital is to be devoted to the work of administering to the sick — a nonsectarian purpose or use, — the same as it was before its sale to the Sisters of Mercy in 1943 so far as its operation without regard to religious affiliation is concerned; that is to say it is to operate under the same charter powers and for the same purposes authorized by the charter of the Vicksburg Sanitarium granted in 1903 to its Protestant incorporators, as vouchsafed by the bylaws made a part of the application for the funds in question.

We do not contend that the foregoing decisions relied on by the appellant, State Auditor, are not controlling here merely because the constitutional provision involved in each of them was not couched in the same language as Section 66 of our Constitution, but because in our opinion the constitutional provisions under consideration in those cases are different in substance from our Constitutional provision here under consideration.

The ease of Bradfield v. Roberts, 175 U. S. 291, 20 S. Ct. 121, 44 L. Ed. 168, is decisive of the question of *456whether or not a hospital chartered to care for the sick, as the limited object of its creation as in the case of Mercy Hospital — Street Memorial, could receive a grant of aid from the federal government under a contract between the District of Columbia and the directors of the hospital, composed of a monastic order or sisterhood of the Catholic Church, without there being a violation of Article 1 of the Amendments of the Federal Constitution providing that “Congress shall make no law respecting an establishment of religion, . . . .” And the facts there involved make applicable the principles there announced so as to make the grant, in the case now before us, a valid one. This case is cited to show that the doctrine of the separation of church and state is not violated, and also as authority for the proposition that the charter powers of a corporation control, and not the religious beliefs of its stockholders, as to whether it is operated in a secular activity.

It is contended by the appellant that this Court “has already adjudicated the petitioner to be a religious society and pointed out its sectarian nature in the case of Maas v. Sisters of Mercy of Vicksburg et al., 135 Miss. 505, 99 So. 468, but we do not find that the petitioner, for the writ of mandamus in the instant case to whom the grant of state and federal funds is sought to be made, to wit, Mercy Hospital — Street Memorial, with such provisions of its bylaws as are made a part of its contract with the Commission on Hospital Care now before us, was in any manner involved in that suit. Ordinarily the character of the appellee hospital in the instant case would be determined by its own rights and powers under its charter as a separate and distinct corporation from that of Sisters of Mercy of Vicksburg, which was incorporated 42 years prior to the granting of the charter of the appellee hospital, embodying no sectarian purpose among its charter powers granted to Protestant incorporators.

*457While not in point on its facts, bnt only on what this Court has held as to the meaning of the separation of church and state, it will be found that in the case of Chance v. Mississippi Textbook Board, 190 Miss. 453, 200 So. 706, involving the lending of free textbooks to pupils in parochial schools, this Court took high ground on the contentions there made as to what is meant by the separation of church and state, ground from which we should not now retreat.

We think that the finding of the Commission on Hospital Care and of the Circuit Court that the hospital is a nonprofit institution, and that the grant in question is not a donation or gratuity at all, is amply supported by the oral and documentary evidence in the case, and that therefore the judgment appealed from should be affirmed.

Since preparing the original draft of this opinion, we have carefully examined the cases relied upon in the dissenting opinion, and have reexamined the cases relied upon in the briefs of counsel hereinbefore discussed, and we do not feel justified in giving them any different construction and application than that hereinbefore set forth.

The writer would not attempt to justify an opinion of such great length as this one, bnt will say in mitigation that he has been prompted to write at such length because of the great importance of the issues involved, and the status of many other applicants for grants from these funds may be affected hereby.

Affirmed.