Craig v. Mercy Hospital-Street Memorial

Hall, J.

(dissenting).

Dissenting opinions are seldom written on suggestions, of error, but I am impelled to again register my protest against the action of the court in this case. The principles involved are so far-reaching and the decision so wholly contrary to my conception of the applicable law that I feel a further dissent is justified. I shall endeavor to avoid needless repetition of what has been previously written by me and to confine this dissent to additional reasons in support of the conclusions heretofore advanced.

It is my opinion that the appellee is not a nonprofit corporation, and since the controlling opinion herein concedes that a majority of the court knows of no law which would require a stock corporation to destroy its outstanding stock before it can qualify as a uonprofit institution and cites no law to support its conclusion, I shall endeavor to present some of the authorities and to show that the translation of a stock corporation to a nonprofit corporation does not render the stock inert save for voting purposes as asserted in the controlling opinion herein.

*501Our law specifically provides that a nonprofit corporation shall issue no shares of stock, Section 5310, Code of 1942, and yet this corporation has $50,000 of stock outstanding. The Sisters of Mercy acquired every physical asset of the hospital by the mere transfer of these shares of stock to it at par value. This separate corporation, Sisters of Mercy, holds title to those shares of stock in its own name as a corporate entity. It must be admitted that there is no legal obstacle which would prevent the Sisters of Mercy from selling those shares of stock to any other person, firm or corporation at a profit. This is said without any idea of imputing bad faith to the Sisters of Mercy, but it illustrates quite forcefully what could be done with a corporation such as appellee which declares that it is not operated for profit and which could nevertheless make a profit for its stockholders by the simple expedient of selling the shares of stock without disturbing in any manner appellee’s corporate entity. It was to avoid the possibility of just such an event that our Legislature specially provided that nonprofit corporations “shall issue no shares of stock, shall divide no dividends or profits among their members,” etc. The legislature did not intend that a nonprofit corporation should issue any shares of stock for the very patent reason that if it did issue capital stock the same could easily be made the subject of barter and trade and the law could thereby be circumvented. The law prohibits not only the declaring of dividends but also the making of profits, and if a corporation’s structure is such that its stockholders could make a profit by the sale of stock it does not and cannot be in truth and in fact a nonprofit corporation.

Let us consider in this connection what has already occurred in appellee’s corporate structure. It was organized in 1903 as a stock corporation for profit under the name of Vicksburg Sanitarium. In 1918 it undertook to obtain exemption of its property from taxation and this court held that it was not entitled to such exemp*502tion because it was not a nonprofit or charitable corporation. Mayor & Aldermen of City of Vicksburg Sanitarium, 117 Miss. 709, 78 So. 702. In 1933, a competing institution, with a similar name, in the same city, viz., Vicksburg Hospital, Inc., amended its charter so as to classify itself for tax exemption purposes as a charitable or nonprofit corporation, and upon allowance of such exemption by the circuit court the matter came to this court on appeal and a decision was rendered on September 23, 1935; holding that it was entitled to such exemption. See Board of Supervisors of Warren County v. Vicksburg Hospital, Inc., 173 Miss. 805, 163 So. 382. The question of outstanding capital stock was not involved in the decision. On October 21, 1935, this court overruled a suggestion of error in the case last mentioned and on that very same day the appellee herein had its charter amended so as to declare itself a nonprofit corporation; however, its stockholders did not surrender their shares of capital stock so as to come within the provisions of our statute, but tenaciously held the same; they did not give up their investment to the cause of charity; they had an original investment of $50,000 in the appellee corporation, and they retained their shares of stock evidencing this investment until 1943 when they sold the same to Sisters of Mercy at par. Thereby they recovered every dollar of their original investment, and just as easily they could have sold their stock certificates for two or three times its par value if they had found a purchaser at that price. Since the sale of this stock to Sisters of Mercy there has been no change whatever in the appellee’s corporate structure except that by charter amendment its name has been changed to Mercy Hospital — Street Memorial. The holders of that stock today have the legal right to sell it at a profit.

The authorities are numerous as well as unanimous in holding that a nonprofit or charitable organization shall issue no shares of stock. It would unduly extend this *503dissent to cite all the cases on the subject, but I mention a few wherein the principle is unequivocally announced and wherein scores of others are cited. So far as I can find there is not one single decision to the contrary except the two controlling opinions in the case at bar.

In Congregational Sunday School & Publishing Society v. Board of Review, 290 Ill. 108, 125 N. E. 7, 10, it was held: “The principal and distinctive features of a charitable organization are that it has no capital stock and no provision for making dividends or profits”. This was quoted verbatim in People ex rel. Hellyer v. Morton, 373 Ill. 72, 25 N. E. (2d) 504.

In People v. Y. M. C. A. of Chicago, 365 Ill., 118, 6 N. E. (2d) 166, 167, 169, it was said: “The principal and distinctive features of a charitable organization are that it has no capital stock and no provision for making dividends or profits for private gain.”

The opinion in Stearns v. Association of the Bar of City of New York, 154 Misc. 71, 276 N. Y. S, 390, 394, in discussing charitable or nonprofit organizations said: “Their principal and distinctive features are that they have no capital stock and no provision for making dividends or profits”.

The case of Baptist Hospital v. City of Nashville, 156 Tenn. 589, 3 S. W. (2d) 1059, 1060, involved a claim for tax exemption by the hospital as a charitable or nonprofit corporation, and the Supreme Court of Tennessee said: “Their principal and distinctive features are that they have no capital stock and no provision for making-dividends or profits”.

In Farm & Home Savings & Loan Ass’n. of Missouri v. Armstrong, 337 Mo. 349, 85 S. W. (2d) 461, 467, the Supreme Court of Missouri said: “Under the weight of authoritative decisions, Hardin College is classifiable as a charitable educational corporation. The distinctive features of a charitable corporation are that it has no capital stock and no provisions for dividends or profits”.

*504In the case of In re Coleman’s Estate, 66 Idaho 567, 163 P. (2d) 847, 848, it was held: “The distinctive features of a charitable organization are that it has no capital stock and no provision for making dividends or profits”. This was cited with approval and quoted verbatim by the Supreme Court of Wyoming in Town of Cody v. Buffalo Bill Memorial Ass’n, 64 Wyo. 468, 196 P. (2d) 369.

In Southern Methodist Hospital and Sanatorium of Tucson v. Wilson, 45 Ariz. 507, 46 P. (2d) 118, 119, it was said: “when charity is to be extended, not sporadically and to a few individuals, but to a large number over a long period of time, it is generally administered by some association, corporation, or institution, and principal and distinctive features of institutions of this character are that they have no capital stock and no provisions for making dividends or profits”.

Cases by the dozen following the above quoted views may be found in 11 C. J. p. 304, Note 67, and the supplemental Corpus Juris Annotations, 14 C. J. S., Charities, Section 2. It is established everywhere except in Mississippi that a nonprofit corporation cannot issue any shares of corporate stock and this is for the reasons hereinabove discussed, and yet the two controlling opinions in the case at bar hold outright that the outstanding-stock of appellee corporation is of no import in determining whether or not it is a nonprofit corporation. With due deference, I am reminded of the title of the song which was quite popular during World War I, — “They Were All Out of Step but Jim.”

The original controlling opinion herein quotes at length from the bylaws adopted by appellee just two days before approval of its application by the Mississippi Commission on Hospital Care and plants a goodly portion of its decision upon the recitals in those bylaws which, as pointed out in my original dissent, may be- repealed or amended at any time. I contended then and still *505contend that the bylaws are not properly to be considered in determining appellee’s status as a nonprofit corporation. There is abundant support for my position. In the case of Gitzhoffen v. Sisters of Holy Cross Hospital Ass’n, 32 Utah 46, 88 P. 691, 695, 8 L. R. A., N. S., 1161, it is said: “It has been quite generally held that the nature of the corporation must be determined from its articles of association, and that its character cannot be changed or modified by parol evidence; that the object and purpose for which a corporation is organized must be gathered alone from the written instrument, and it cannot be aided or varied or contradicted by testimony or averments aliunde the instrument itself. Craig v. Benedictine Sisters Hosp. Ass’n., 88 Min. 535, 93 N. W. 669; Gould v. Fuller, 79 Minn. 414, 82 N. W. 673; People ex rel. State Bd. of Charities v. New York Society for Prevention of Cruelty to Children, 161 N. Y. 233, 55 N. E. 1063; Atty. Gen. v. Lorman, 59 Mich. 157, 26 N. W. 311, 60 Am. Rep. 287; Detroit Driving Club v. Fitzgerald, 109 Mich. 670, 67 N. W. 899; City of Kalamazoo v. Kalamazoo Heat, Light & Power Co., 124 Mich. 74, 82 N. W. 811; State v. New Orleans Water Supply Co., 111 La. 1049, 36 So. 117; 1 Clark & Marsh, on Corporations, Section 36h; 3 Ency. p. 615.

The case from which I have just quoted involved a suit for damages in tort against the hospital corporation which defended upon the ground that it was a nonprofit and charitable corporation and hence- not subject to liability in such a suit. The trial court sustained this position but the Supreme Court of Utah reversed it on the ground that the very charter of incorporation showed that it had outstanding shares of capital stock. In this connection the court said: “The law under which the defendant was organized required that the objects of the corporation should be fully set out in the articles of incorporation. This was done by the defendant. . . . The law further required that, if the corporation is organ*506ized for pecuniary profit, it must set forth in its articles thé amount of the capital stock and the number of shares into which the same is to be divided, with the amount of each share, which shall not exceed $100. This the defendant did by stating its capital stock to be $10,000, divided into 10,000 shares of $1 each. The principal features of charitable corporations are ‘that they have no capital stock, and that their members can derive no profit from them.’ 6 Cyc. 974, McDonald v. Mass. Gen. Hospital, 120 Mass. 432, 21 Am. Rep. 529.” It will be noted that the stated requirements of the Utah statute are almost exactly like the requirements of our statute, Section 5310, Code of 1942. On the trial of the case the lower court admitted evidence tending to show that the hospital was not in truth and in fact operated for profit, and the Supreme Court of Utah, after discussing this action, said: “We are therefore of the opinion that the court erred in admitting the testimony referred to. Looking at the articles themselves, we are also of the opinion that the purpose of the association, as therein disclosed, is for pecuniary profit, and not charity.”

In Sussex Trust Co. v. Beebe Hospital of Sussex, Inc., 25 Del. Ch. 172, 15 A. (2d) 246, 247, the court had under consideration the question whether the hospital was a nonprofit corporation so as to be entitled to benefits under a will, and the court pointed out only the provision of the charter which authorized the issuance of corporate stock, and said:

“Although some of its purposes are of a charitable nature, the certificate of incorporation, upon its face, purports to create an organization for pecuniary profit. Article 4 of the certificate provides:
“ ‘The amount of the total authorized capital stock of this corporation is Ten Thousand Dollars ($10,000.00) divided into One Hundred (100) shares of the par value of One Hundred Dollars ($100.00) each.
“ ‘The amount of capital stock with which this corporation will commence business is One Thousand Dollars’.
*507“There is nothing in the charter to prevent participation in corporate profits by private shareholders. It is when income may loe applied to the profit of the founders or shareholders that ’business has a beginning and charity an end’. Butterworth v. Keeler, 219 N. Y. 446, 114 N. E. 803, 804. Such an organization is not a charity. William Budge Memorial Hospital v. Maughan, 79 Utah 516, 3 P. (2d) 258, 13 P. (2d) 1119; Stratton v. Physio-Medical College, 140 Mass. 505, 21 N. E. 874, 5 L. R. A. 33, 14 Am. St. Rep 442; 2 Restatement of the Law of Trusts, Section 376; 2 Bogert on Trusts and Trustees, Section 365; 3 Scott on Trusts, Section 376.”

The case of William Budge Memorial Hospital v. Maughan, 79 Utah 516, 3 P. (2d) 258, 262, 13 P. (2d) 1119, involved a claim for tax exemption on the ground that the hospital was a charitable corporation. It was organized in 1914 and up to the time of the trial in 1928 it had never paid out any dividends to its stockholders, but all profits had been used for increasing its hospital facilities. The Supreme Court of Utah pointed out that the corporation had $50,000 outstanding capital stock and said:

“It is also urged in behalf of the plaintiff that the hospital was never carried on for pecuniary profit for the reason that no dividends were ever declared or paid to the stockholders and none were declared or paid for the year 1928.
“The fact that the managing directors of a hospital operated for profit deemed it advisable to permit the earnings of the institution to accumulate and then appropriate such funds into buildings and equipment for the benefit of the hospital, rather than to pay them out as dividends to the stockholders, is not necessarily indicative of either a benevolent or charitable purpose. It often is in line with sound business principles to withhold dividends and convert the money into increased facilities of the institution. Certainly every stockholder is pecuniarily *508benefited. His holdings in the corporation are enhanced in value. The management which dictated such a policy, in the course of years, when the plant had increased in value to considerable proportions, largely because it was not burdened by the payment of taxes, might be able to dictate a dissolution of the corporation, to the immense profit of all the stockholders.”

A petition for rehearing was filed in the last cited case and disposing of the same the Supreme Court of Utah said in 13 P. (2d) 1119: “Plaintiff corporation, as shown by its articles of incorporation, was organized for profit. Its property was used for the purposes mentioned in its articles of incorporation, and hence the use to which the property was put- was likewise for profit and not for charitable purposes. The mere fact that the profits derived from conducting the hospital were used for its enlargement rather than disbursed to the stockholders in dividends did not change the character of the use to which the property of plaintiff' corporation was put. Increasing the assets of the corporation and hence the value of the-stock held by its stockholders is in no sense a charitable purpose.” (Emphasis supplied.)

Upon the expiration of appellee’s charter of incorporation all of its property will become vested in Sisters of Mercy, a sectarian corporation which owns all its outstanding stock. The sole stockholders will reap the benefit of every dollar of increase in value of appellee’s assets and will thereby indirectly make a profit on its investment while urgently proclaiming to this court that it is a nonprofit corporation because it has not declared any dividends to its stockholders. Furthermore the stockholders may in the meantime sell their shares of stock for more than par value and thereby make a profit without declaring any dividends. I confess that I am intellectually unable to follow the controlling opinion in its conclusion on this point. Under the plain provisions of the statute which authorizes grants to hospitals, no hospital can *509qualify to receive it unless such hospital is a nonprofit organization under our laws. Chapter 430, Laws of 1948, specifically limits the grants to two classes of hospitals, viz., (a) those which are publicly owned and operated by the state or a political subdivision thereof, and (b) “those nonprofit institutions 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.” (Emphasis supplied.) Here the earnings of appellee, accumulated in its surplus from time to time by increase of its assets, not only “may lawfully inure” but will positively inure, when its charter expires, to the benefit of Sisters of Mercy, or their assigns, or if, in the meantime, the shares of stock are sold for profit, the excess of the sale price over par value will likewise inure to the stockholders. Thus in either of two ways a part or all of the net earnings of appellee may lawfully inure to a private shareholder, which fact under the very terms of the statute disqualifies appellee from receiving the grant in question.

But it is said in the controlling opinion on suggestion of error, without the citation of any authority, that if the stock certificates be assigned without the approval of the Commission on Hospital Care, either with or without a capital gain to the present owners, the entire property is thereupon transfixed by a lien in favor of the state to guarantee the reasonable amount of its grant, whereupon the conclusion is reached that for at least the next twenty years no part of the net earnings can possibly inure to the benefit of any shareholder. I disagree with both the premise and the conclusion. The only law for a lien in favor of the state is found in Chapter 430, Laws of 1948, which provides that if any hospital or institution to which funds have been paid shall at any time within twenty years be sold or transferred to any person, agency or organization which is not qualified *510to receive a grant in aid or which is not approved as a transferee by the commission, or ceases to be a nonprofit institution, then a lien in favor of the state shall attach to the property. The contract here involved is between the commission and Mercy Hospital — Street Memorial, a corporation. By no stretch of the imagination can a transfer of the shares of stock in that corporation change its status as a separate legal entity; if this were the case, then every stock exchange in the country would be forced to close today. In 18 C. J. S., Corporations, Section 5, p. 370, it is said: “The existence of a corporation is unaffected by changes in its membership, or by the death, or incapacity of, its members.” And in 13 Am. Jur. p. 157, Corporations, Sec. 6, it is said: “A corporation is for most purposes an entity distinct from its individual members or stockholders who, as natural persons, are merged in the corporate identity, and remains unchanged and unaffected in its identity by changes in its individual membership.” A transfer of all or any portion of appellee’s corporate stock cannot in any manner affect its corporate identity or its contract with the Commission on Hospital Care and cannot impose any lien upon its property. Under the specific terms of said Chapter 430, Laws of 1948, there is no provision for a lien to the state upon a mere transfer of corporate stock.

In my opinion the grant in this case is a donation, and in this connection there is hardly any ground for argument as to the amount of the donation. The majority opinion on the suggestion of error points out that the state’s share of this grant is a mere $214,000, and that the federal government is putting up an additional $527,000 to bring the total up to $741,000; but what that opinion fails to take into consideration is that the federal government has turned over to the Mississippi Commission on Hospital Care a large sum of money to be used in the state’s hospital construction program, *511and these federal funds are under the control of the Commission to be disbursed in accordance with the law, and if this amount of $527,000 federal funds were not donated to appellee it would not be turned back into the federal treasury but would remain under control of the state and could be used in constructing other hospitals which qualify for grants under the law. This $537,000 was not plucked off a gravy train nor left by Santa Claus on'a Christmas tree: It is nothing but public funds, taken from the pockets of the taxpayers, and turned over to the Commission for distribution to the public hospitals of Mississippi. The amount of the grant is $741,000 and no sort of mathematical gymnastics can change it.

The concurring opinion rendered herein upon the original consideration of this case states that appellee’s new hospital is to have 175 wards and that the hospital contracts to use and maintain 10% of such wards for charity patients for twenty years. This figure was taken from appellee’s brief which is not supported by one word in the record. The record shows that appellee proposes to erect a hospital of 150 beds, — not 175 wards. Upon the original consideration of this case the court proceeded upon the assumption that the appellee had contracted and agreed to keep 10% of these beds constantly occupied by charity patients, at its own expense, for a period of twenty years. Such is absolutely not the ease. Its entire obligation to the state is set out in its application for this grant of $741,000 of public funds. That application contains this obligation: “In the event the hospital and/or other facilities involved in this project as fully described and set forth in said original application should operate at a loss during the first two years after the same is/are ready to begin operations, the applicant will and does hereby underwrite the cost of such operations for such period and will provide funds and make up the operation deficit; such funds to be provided from funds on hand and available for such purposes or to *512be raised and so provided by lawful means at the disposal of the applicant.” Here the appellee obligated itself to operate this hospital without aid from the state for a period of two years and no longer. The rate fixed by the legislature for charity patients in private hospitals at the time of approval of the grant in question was $4 per day, Ch. 378, Laws of 1946; since approval of the grant it has been raised “not to exceed $6.00 per day”, H. B. No. 994, Laws of 1950, but the appropriation by the legislature for the next biennium still limits the outlay to $4.00' per day per patient as heretofore. The controlling opinion herein asserts that if there is only a reasonable public demand for charity beds and services, the benefit to the state, by minimum bases of computation, will far exceed its outlay, but the opinion carefully refrains from disclosing any figures to sustain such a conclusion. As heretofore pointed out, appellee proposes to erect a hospital with 150 beds and to make 10%, or 15 of these, available for charity patients who are eligible and qualify under the per capita fund for charity hospitalization. If' every one of these beds is occupied by a charity patient every day in the year there would be a saving to the state of $21,900 per year at the rate of $4.00 per day. This is the rate which must be used because the state can obtain the same facilities and services to charity patients from numerous other hospitals at that price. For the two years for which appellee has contracted to take care of these patients at its own expense, this would be a total saving of $43,800 for the $741,000 outlay.. However, appellee concedes in its brief that the daily average occupancy of charity beds will probably be approximately 75%; this reduces the saving to $16,425 per year or a total of $32,850 for the two year period, which is approximately two forty-fourths of the entire grant. But if appellee maintains these charity beds and takes care of the charity patients at its own expense in accordance with the conclusion of the majority for the full period of *513twenty years (which will be hereinafter discussed) then the saving to the state will still be only $16,425 per year, which is only 2.2% of the total outlay; thus the state will obtain an income of 2.2% per annum on its investment and will lose the principal thereof. This may be a thrifty business deal for the state, as concluded by the majority of the court, but it is a transaction which would certainly have no appeal to a financier in the investment world.

The controlling opinion on sugggestion of error says that “Under the contract with the Commission, the hospital has agreed to furnish up to ten per cent of its bed capacity free to indigent patients”. With the utmost deference, I challenge a quotation from the contract to this effect. Aside from the paragraph last above quoted wherein appellee is obligated to underwrite the cost .of operation and maintenance for two years and no longer,, the only other obligation to charity patients contained in the application and contract is this: ‘ ‘ That at all times at least ten per cent of the bed capacity of the hospital shall be made available as charity facilities for the use of charity patients qualified under State Charity Hospitalization, Section 7130, Code of 1942, and amendments thereto and under other laws on' the subject.” This obligation is of course limited to a period of twenty years for by the terms of the contract and the statute everything provided by this $741,000 grant is free from all lien of the state for a breach thereof after twenty years. Now under the first quoted provisions the appellee is obligated to furnish the facilities at its own expense and out of its own funds for a period of only two years, and when it obligates to make 10% of its bed capacity available for the use of charity patients there' is not included in this obligation that it will care for these patients at its own expense and out of its own funds. The very law which authorizes grants to nonprofit hospitals, Ch. 430, Laws of 1948, in the last paragraph pro*514vides: “The commission shall require said hospitals to maintain at least ten per cent (10'%) of its hed capacity if needed for charity patients who are eligible and qualify under the per capita fund for charity hospitalisation.” (Emphasis supplied.) The same provision is found in the last paragraph of Sec. 6, Ch. 363, Laws of 1946, which was amended by said Ch. 430, Laws of 1948.

The whole organization for administration of the per capita fund for charity hospitalization is set out in Sections 7130-7146 of the Code of 1942, where there was created in 1936 the State Hospital Commission to which was vested this duty, and which Commission is not to be confused with the Mississippi Commission on Hospital Care created by Ch. 363, Laws of 1946. Appropriations to the per capita fund for charity hospitalization are made by the Legislature every two years and are administered by the State Hospital Commission, — not by the Mississippi Commission on Hospital Care. There is nothing whatsoever in said Ch. 363, Laws of 1946, or Ch. 430, Laws of 1948, manifesting any intention of the Legislature to abandon appropriations for said per capita fund which have been regularly made since 1936.

Section 12 of Ch. 363, Laws of 1946, authorizes a disposition of the five charity hospitals now owned and operated by the state, and it is contemplated that under the state-wide hospital program these five hospitals will be disposed of or abandoned in due course. And while at the present moment appellee could not qualify to participate in the state-wide charity hospitalization fund because one of the charity hospitals owned by the state is situated in'the same county as appellee’s hospital, it is quite manifest that as soon as the State Charity Hospital in Vicksburg is abandoned or disposed of as specifically contemplated by said Section 12, there will no longer remain any obstacle to prevent appellee from participating in the distribution of state funds for the care of charity patients. The controlling opinion says that the *515appellee concedes and agrees as a part of its contention that no such reimbursement can or will be requested; this assertion by the court is based solely upon these statements of its counsel in his brief on the suggestion of error: “Mercy Hospital does not now or ever contemplate an application to the Commission for maintenance. Mercy Hospital expects to and will permanently maintain itself, and the Commission has found that it is capable of doing so. . . . Neither the statutes nor the contract contemplate any reimbursement to Mercy Hospital for charity patients. Mercy Hospital certainly expects no such reimbursement. The question could not possibly arise in the present status of the laws or the contract. ’ ’

Appellee’s counsel was referring to the Mississippi Commission on Hospital Care. That commission did not exact of appellee any sort of agreement that it would not receive per capita charity hospitalization funds after the expiration of two years, but, on the contrary, was very careful to provide in the contract that appellee should underwrite the entire expense of operation for two years and no longer. With no imputation whatsoever of bad faith upon the part of appellee in this matter, and viewing the question solely upon the basis of its legal right to apply for a grant of such funds for the care of charity patients after the expiration of two years, there is absolutely nothing to prevent it from obtaining such a grant from the State Hospital Commission, an entirely different agency of the state, after closing of the State Charity Hospital at Vicksburg; Senate Bill No. 499, Laws of 1950, specifically authorizes the State Hospital Commission to disburse the chárity hospitalization funds “to those counties in the state in which state supported charity hospitals are not operated” and as soon as the State Charity Hospital at Vicksburg ceases to operate, as it assuredly must under the provisions of Section 12, Chapter 363, Laws of 1946, the door is wide open for *516appellee to participate in the distribution of these funds. The statement of its counsel, made for the first time in the brief on suggestion of error, that it has no intention of so applying, is not a binding obligation, and certainly this court has no.legal right to impose as a condition of affirmance an obligation that it shall not so apply. Such a condition of affirmance is nothing short of a rewriting of appellee’s contract with the state so as to insert an additional contractual obligation therein without its consent, and is a procedure, so far as I can find, that is wholly unheard of in the jurisprudence of this state.

Under the first quoted paragraph of the contract the appellee is definitely obligated to operate the hospital with its own funds for two years. If it were contemplated that after two years the 10% of beds were to accommodate charity patients at the expense of the hospital, then why did not the contract so state? After the expiration of two years the beds are to be made available as charity facilities for the use only of those charity patients who can qualify for participation in the per capita fund to be appropriated biennially by the legislature out of the state treasury. That is exactly what is written into the very law which authorizes a grant to private nonprofit hospitals and which is referred to in the provision of the contract last above quoted. Prom the whole contract the only reasonable conclusion is that the state will be expected to pay for the maintenance of charity patients out of the per capita fund. I readily concede that the Mississippi Commission on Hospital Care has no authority to obligate the state to provide a per capita fund out of which payments will be made for charity patients, but the point is that appellee is not obligated to take care of a single charity patient after two years unless the state does make such funds available 'to it. It is certainly true that the appellee has not bound itself to take care of these patients at its own expense and out of its own funds; its only ob*517ligation in that respect is limited to two years, and if it were not contemplated that it was to he reimbursed out of the per capita fund for charity patients, why indeed does the second quoted paragraph of the contract make direct reference to charity patients who are qualified under the regulations pertaining to that fund, and why does Sec. 6 of Ch. 363, Laws of 1946, make reference to this 10% bed capacity, “ if needed for charity patients who are eligible and qualify under the per capita fund for charity hospitalization”? And why does Ch. 430 of the Laws of 1948 contain precisely the same provisions in exactly the same language? Undoubtedly it is contemplated and expected that after two years the appellee will share in the per capita fund if it takes care of any charity patients. Therefore we fall back to the proposition that at most, if every charity bed is filled with a charity patient for every day of the two years to which appellee is obligated, the state will receive in services rendered to its charity patients $43,800 for a consideration of $741,000. In my opinion, under the decisions of this court, this consideration is not inadequate as to amount to a donation.

In State ex rel. McCullen, Land Commissioner, v. Adams, 185 Miss. 606, 188 So. 551, in an opinion written by the present Chief Justice, it was held that a consideration of $160 paid for state lands worth $1,600 was so inadequate as to amount to no consideration, and the patent from the state to the purchaser was held void.

In State ex rel. McCullen, Land Commissioner, v. Tate, 188 Miss. 865, 196 So. 755, 756, this court had under consideration a similar state of facts and held a state patent void, and in so doing, speaking through Judge Griffith, said: “This matter of the sufficiency of the consideration for a patent to state tax forfeited land was fully explored in Slay v. Lowery, 152 Miss. 356, 119 So. 819, and the report of that case shows that the judges were all in agreement that a patent for a grossly inadequate con*518sideration cannot be allowed; that such a transaction would be in contravention of the provisions of Section 95, Constitution 1890, which prohibits the donation, directly or indirectly, to individuals or to corporations, of any of the lands belonging to, or under the control of the state.”

Later, in Koonce v. Board of Sup’rs. of Grenada County, 202 Miss. 473, 32 So. (2d) 264, 265, 456, in an opinion written by the present Chief Justice, where timber on sixteenth section school lands worth $4000 to $5000 was sold for $300, it was held that the transaction was void because the consideration was so inadequate as to amount to a donation in contravention of Section 95 of the Constitution, and in this connection the court said: “. . . the Board of Supervisors had no right to sell this trust property, which it was administering as an agency of the State on behalf of the educable children of the township in the capacity of a trustee, at such a grossly inadequate price in violation of Section 95 of the State Constitution, which prevents ‘lands belonging to, or under the control of the state (from being) donated directly or indirectly, to private corporations or individuals, ’ etc. ’ ’ The Court then cited with approval State ex rel. McCullen v. Tate, supra.

In State v. Roell, 192 Miss. 873, 7 So. (2d) 867 in an opinion written by the present Chief Justice, it was reiterated that a purchase price for state lands may be so inadequate as to amount to a donation in contravention of Section 95 of the Constitution.

In spite of these decisions the majority of the court held in the case at bar, on April 24, 1950, with reference to the word “donation” as used in Section 66 of the Constitution, 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”. (Emphasis supplied.) [45 So. (2d) 815.]

*519Only two weeks later, a majority of this same court, speaking through the same Chief Justice, in the case of State ex rel. Kyle v. Dear, Miss., 46 So. (2d) 100, not yet reported in the State Reports, held that a conveyance of timber on sixteenth section lands for a consideration of $500 when it later sold for $4000 constituted a £ £ donation” within the meaning of Section 95 of the Constitution, which provides, in part: “Lands belonging to, or under the control of the state, shall never be donated directly or indirectly, to private corporations or individuals . . . .” Consistency in decisions is highly desirable, and yet in the case at bar it is held that a donation is without any consideration whatsoever, when that word is used in Section 66 of the Constitution, while in the five other cases hereinabove last cited it was held that a donation under Section 95 of the same Constitution is effected where there is a transfer of property for an inadequate consideration. In other words, the position of the majority herein is that when the framers of our Constitution used the word “donation” in Section 66 they meant one thing, and when the same framers used the same word just twenty-nine sections later it meant an entirely different thing.

Now, if, as held in the foregoing authorities, a donation may result from an inadequate consideration, it is well to examine the consideration for the $741,000 grant in this case, and when that is done we find that the only return which is absolutely assured to the state over the two year period is a maximum'of $43,800, or approximately one-seventeenth, of the grant, while in State ex rel. Kyle v. Dear, supra, a conveyance for one-eighth of the true value was held to he so inadequate as to constitute a donation. I cannot bring myself into accord with such a vacillating position. If the grant in the Dear case, and the others which follow the same pattern, was a donation, then the grant to appellee must of necessity likewise be a donation, if it is a donation, it violates Section 66 of the Constitution and should not be permitted to stand.

*520In my opinion the grant in this case is expressly prohibited by Section 208 of the Mississippi Constitution. While this point was raised for the first time on suggestion of error, the court makes no unusual concession in giving it consideration but has precedent for such action. Mars v. Germany, 135 Miss. 387, 100 So. 23. The constitutional section just mentioned provides: “No religious or other sect or sects shall ever control any part of the school or educational funds of this state; nor shall any funds be appropriated toward the support of any sectarian school, or to any school that at the time of receiving such appropriation is not conducted as a free school.” Stripping this section of its inapplicable part and reducing it to that portion which I think is violated by this grant, we have “nor shall any funds be appropriated ... to any school that at the time of receiving such appropriation is not conducted as a free school. ’ ’ Let it be noted that this section does not apply alone to elementary schools or grammer schools or high schools, but to “any school”.

The original charter of incorporation, approved in 1903, declares the purposes of appellee corporation to be twofold, viz., (1) to construct, maintain and operate a sanitarium for the treatment of sick or injured persons, and (2) “to maintain in connection therewith a training school for nurses.” That was when appellee was admittedly a corporation organized for profit. When the charter was amended in 1935 the purposes were declared to be (1) to construct, maintain and operate a hospital or sanitarium for the treatment of sick-or injured persons and (2) “and to provide, maintain and operate in connection therewith, and as a part of said hospital or sanitarium, a training school and home for nurses.” This portion of the charter has never since been altered in any manner. Thus it is seen that the avowed purpose of appellee for forty-seven years has been and still is to provide, maintain and operate a training school for *521nurses in connection with and as a part of its hospital. In Section 7 of appellee’s bylaws, adopted just two days before approval of the grant in question, it was declared that the Hospital Administrative Board created by the bylaws “shall give all possible assistance towards the proper functioning and operation of a school of nursing for the education of nurses.” Each time the appellee mentioned the training of nurses it called the program a school. This is a school conducted by appellee in its hospital and (quoting from its charter) “as a part of said hospital”. Appellee is both a hospital and a school, and the aforesaid solemn declarations of its charter and bylaws should not be confused with that portion of its contract with the Commission on Hospital Care designated as paragraph (j) and quoted in the majority opinion on the suggestion of error wherein it further agreed to contribute such funds, equipment and personnel as it may have available in co-operation with said Commission and the other hospitals of the state in carrying on a state-wide program of nursing education to be hereafter inaugurated by the Commission. Paragraph (j) of the contract refers only to the state-wide program of nursing education to be set up and conducted by the Commission on Hospital Care and does not in any manner deal with or refer to the school for the education of nurses conducted by appellee in connection with and as a part of its hospital. The majority opinion says there is nothing in the record to indicate that such facilities are either a school or are sectarian. I will not further discuss the sectarian feature for the reason that it is fully covered in my original dissent and for the further reason that Section 208 of the Constitution prohibits any funds from being appropriated to the support of any school which is not conducted as a free school regardless of whether it is or is not sectarian. As to whether the record shows that appellee’s facilities for the education of nurses is a school, there appear in the record three docu*522ments, — (1) the original charter of incorporation, (2) the 1935 amendment thereto, and (3) the bylaws adopted by appellee on October 8, 1949, while its application was pending for the grant in question and just two days before final approval of said grant, and in each and every one of these instruments the appellee itself referred to its program for the education of nurses as a school. Since the appellee repeatedly designated this portion of its corporate functions as a school, I am unable to follow the majority in holding that it is not a school.

The majority opinion further says in justification of its conclusion that no part of the school funds is granted by the commission. Said Section 208 begins with a prohibition against the control of any part of the school funds of the state by any religious sect; I have never contended that the appropriation to appellee is out of the school funds, but I do contend that the last portion of Section 208 prohibits the appropriation of “any funds ... to any school (sectarian or otherwise) that at the time of receiving such appropriation is not conducted as a free school.” This covers institutions such as Gulf Park College, Gulf Coast Military Academy, and many others throughout the state, which are not controlled by or connected with any religious sect.

The majority opinion furthermore repeatedly points out that the grant here in question is for construction only and is not for maintenance. I must confess that I cannot see where this makes any difference so far as the constitution- is concerned; it prohibits the appropriation of any funds to any school that is not operated as a free school regardless of whether such funds are for construction or for maintenance. Appellee makes no contention that its -nursing school is a free school. According to this portion of the conclusions of the majority of the court, the constitution would not be violated by the appropriation of $741,000 to Gulf Park College, or even church owned schools such as Millsaps College, Missis*523sippi College, Belbaven College, and the numerous parochial schools of the state, so long as such appropriation is for the construction of buildings and not for maintenance. By the same token the Legislature could appropriate unlimited money to any religious denomination for the erection of new churches throughout the state so long as the money is used for construction purposes and not for the operating expenses of such churches. It is startling that the court would try to make a distinction between construction costs and maintenance costs without citing a single authority or precedent. It seems to me that the distinction is wholly imaginary and is supported by neither logic nor reason, and will rise to plague us in the future.

For the reasons hereinabove given, as well as those set out in my original dissent, I respectfully dissent from the court’s action in overruling the suggestion or error.

Lee, J., joins in this dissent.