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SACRED HEART HOSPITAL ALLENTOWN ET AL. v. LANSHE (10/12/71)

decided: October 12, 1971.

SACRED HEART HOSPITAL OF ALLENTOWN ET AL., APPELLANTS,
v.
LANSHE



Appeal from decree of Court of Common Pleas of Lehigh County, June T., 1969, No. 14, in case of Sacred Heart Hospital of Allentown by Raymond J. Leichner et al. v. James C. Lanshe et al.

COUNSEL

Raymond J. Bradley, with him Leonard J. Bucki, H. P. McFadden, William D. Valente, and Wolf, Block, Schorr & Solis-Cohen, for appellants.

K. Robert Conrad, William S. Hudders and Boyd H. Walker, with them A. H. Wilcox, Pepper, Hamilton & Scheetz, and Butz, Hudders & Tallman, for appellees.

Bell, C. J., Eagen, O'Brien, Robert, Pomeroy and Barbieri, JJ. Opinion by Mr. Justice Roberts. Mr. Justice Jones took no part in the consideration or decision of this case.

Author: Roberts

[ 445 Pa. Page 58]

In this appeal we must decide whether it was error to dismiss without a hearing a petition claiming certain provisions of a consent decree had been violated. We hold that in the circumstances of this case, a hearing on the issues raised by the petition for supplemental relief is necessary.

A brief review of the factual background follows. The City of Allentown has three hospitals: Allentown General, Allentown Osteopathic, and Sacred Heart, a Catholic, church-related hospital. Some time ago it became evident that all three institutions were in need of extensive improvements. A joint campaign was agreed upon to raise the necessary funds, and the hospitals organized a non-profit corporation, Allentown Ahead Fund, Inc., primarily for this purpose. Over $6,800,000 has been raised in cash and pledges for the contemplated renovations. However, a dispute eventually developed as to the degree to which the hospitals would participate in establishing a joint facility.

On September 15, 1969, Sacred Heart Hospital by a member of its Board of Managers, as well as two members of the hospital's professional staff and a member of the community filed a complaint in equity against other members of Sacred Heart's Board of Managers, Ahead Fund, Inc., Allentown Osteopathic, and the Allentown Hospital Association seeking to prevent certain amendments to Sacred Heart's charter and

[ 445 Pa. Page 59]

    articles of incorporation. The proposed amendments would have authorized a joint facility that allegedly would have reduced Sacred Heart's status as a general services hospital and school of nursing and destroyed the character and integrity of Sacred Heart as an independent, church-related institution. The complaint also sought, inter alia, to restrain Ahead Fund from disbursing funds held for Sacred Heart, and to prevent any encumbering of Sacred Heart's assets or transfering of any of its services to the proposed joint facility.

The answer denied the allegations in the complaint and attacked what appellees have characterized as the "remarkable" legal position that the power conferred by the Pennsylvania Non-Profit Corporation Law*fn1 to amend a charter is suspended whenever the power comes into conflict with the hospital's Catholic character.

The litigation was terminated by a settlement agreement executed on March 3, 1970, and approved by the court on March 4, 1970, ". . . with the same force and effect as though fully and completely set forth in this order."

On January 16, 1971, the same appellants and the Most Reverend Joseph McShea, Bishop of the Roman Catholic Diocese of Allentown,*fn2 filed a "Petition for Supplemental Relief and Enforcement of 'Final Decree' Entered March 4, 1970", naming certain members of Sacred Heart's Board of Managers and Ahead Fund as defendants. The ...


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