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South Side District Hospital v. Hartman

Supreme Court of Arizona

November 20, 1944

SOUTH SIDE DISTRICT HOSPITAL, a Corporation, Appellant,
v.
PHILIP F. HARTMAN, in His Own Behalf and in Behalf of Others Similarly Situated, Appellee

APPEAL from a judgment of the Superior Court of the County of Maricopa. C. C. Faires, Judge.

Judgment reversed.

Messrs. Sloan, Scott & Green, and Mr. Albert W. Gurtler, for Appellant.

Mr. Mark Wilmer, for Appellee.

Ross, J. McAlister, C. J., and Stanford, J., concur.

OPINION

Ross, J.

[62 Ariz. 68] This action was brought by Philip F. Hartman, a resident and taxpayer of the City of Mesa, in his own behalf and in behalf of others similarly situated, to secure a declaratory judgment as to whether the lease arrangement between the South Side District Hospital, a corporation, and the city of Mesa is legal and permissible under the law.

The City of Mesa is now and has been during all the times herein mentioned the owner of lot 5 and part of lot 6, in block 35, in said city. In 1923 the buildings on said lots were used by the city for hospital purposes, and have been used continuously for such purposes ever since. From time to time during that period and to the present time there have been added housing facilities and equipment, some by personal donations, some by corporations, some by the federal government, and some by the hospital, so that at the time this action was brought the hospital plant and equipment were estimated to be worth something like $ 100,000.

[62 Ariz. 69] The city, except for a short time after it acquired title to the property, has never operated the hospital, that being done by the South Side District Hospital under a more or less loose arrangement. On May 10, 1935, the city, in a written lease, leased to the South Side District Hospital the hospital property and equipment for a recited consideration of $ 1 per year. In such lease it was stipulated that the hospital should be "a community hospital for the use and benefit of the inhabitants of the City of Mesa and surrounding community"; that the charges for accommodations

Page 538

therein would be "reasonable and equal to all patrons" and that all physicians and surgeons conforming to reasonable rules and regulations might practice there. Other provisions were that lessee pay any debts contracted by it in the operation of plant, maintain the buildings in good condition and repair, replace furniture or equipment lost or destroyed, and conduct the business on a non-profit basis and for the benefit of the community.

It was provided that lessee might accumulate the necessary reserve to meet the contingent obligations, to pay the employees and servants according to the usual standard, make charges and accumulate such funds as necessary to comply with the requirements to secure financial aid from the National Housing Administration. The above covenants on the part of the lessee were not all, but were the essential ones.

On April 14, 1937, the lessor, City of Mesa, for a consideration of $ 2, extended the above lease to and until November 1, 1940, and on August 11, 1941, for a consideration of $ 2, such lease was extended to and until November 1, 1942.

Plaintiff in his complaint filed in October, 1941, alleges that the reasonable annual rental value of the hospital plant is $ 4,000; that the lease made in 1935 was made without advertisement for bids, as provided [62 Ariz. 70] by law; that the hospital is not operated as a public hospital, available to all the residents of Mesa and vicinity willing to pay reasonable value for services, but that the South Side District Hospital arbitrarily excludes residents and taxpayers of the aforesaid city and vicinity willing to pay reasonable charges for its facilities, unless attended by a medical doctor or physician "as distinguished from a doctor of osteopathy"; that such arrangement constitutes a donation or grant to said South Side District Hospital, contrary to the constitution and ...


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