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MOONEY ET AL. v. TEMPLE UNIVERSITY COMMONWEALTH SYSTEM HIGHER EDUCATION BOARD TRUSTEES (06/28/72)

SUPREME COURT OF PENNSYLVANIA


decided: June 28, 1972.

MOONEY ET AL., APPELLANTS,
v.
TEMPLE UNIVERSITY OF THE COMMONWEALTH SYSTEM OF HIGHER EDUCATION BOARD OF TRUSTEES

Appeals from decree of Commonwealth Court, No. 199 C. D. 1971, in case of Thomas J. Mooney, individually and as guardian ad litem of Temple University Student Senate, and Michael A. Moore and Peter Bachrach v. Board of Trustees of Temple University of the Commonwealth System of Higher Education et al.

COUNSEL

William T. Hangley, with him William H. Ewing, and Ewing & Cohen, for appellants.

Michael Churchill, with him Peter Platten, and Ballard, Spahr, Andrews & Ingersoll, for appellees.

Robert J. Reinstein, Assistant Professor of Law, Temple University and Samuel Polsky, Professor of Law, Temple University, attorneys for amici curiae.

Jones, C. J., Eagen, O'Brien, Roberts, Pomeroy, Nix and Manderino, JJ. Opinion by Mr. Justice Roberts. Dissenting Opinion by Mr. Justice Manderino.

Author: Roberts

[ 448 Pa. Page 425]

This appeal requires us to decide whether Temple University of the Commonwealth System of Higher Education*fn1 is a state "agency" for purposes of the Inspection and Copying Records Act,*fn2 thereby subjecting it to the requirement of making all its "public records" "open for examination and inspection by any

[ 448 Pa. Page 426]

    citizen of the Commonwealth."*fn3 We agree with the Commonwealth Court that the Legislature, in designating Temple as a part of the Commonwealth System of Higher Education in order to enable Temple to receive increased financial assistance from the Commonwealth, did not transform Temple into a state "agency" for the purposes of the act. We affirm the decree of the Commonwealth Court.

Appellants, students at Temple, a member of the faculty, and the University Student Senate through its guardian ad litem,*fn4 commenced an original action in the Commonwealth Court seeking to compel appellees, the board of trustees, to make available for inspection "[d]etailed financial and budgetary information; minutes of Board of Trustees meetings; and minutes of meetings of committees of the Board of Trustees, including the Executive Committee."*fn5 The board of trustees had refused to honor appellants' requests for detailed financial information. The board did, however, make available "excerpts of meetings of defendant trustees and subcommittees of defendant trustees."*fn6 Appellants base their cause of action both on the Inspection and Copying Records Act and common law.*fn7 Appellees filed preliminary objections requesting dismissal,

[ 448 Pa. Page 427]

    inter alia, on the ground that Temple is not an "agency" within the Inspection and Copying Records Act. The preliminary objections were sustained by the Commonwealth Court in a unanimous opinion by Judge Crumlish. Mooney v. Temple University Board of Trustees, 4 Pa. Commonwealth Ct. 392, 285 A.2d 909 (1972). This appeal followed.

The Inspection and Copying Records Act provides that "[e]very public record of an agency shall, at reasonable times, be open for examination and inspection by any citizen of the Commonwealth of Pennsylvania." Act of June 21, 1957, P. L. 390, § 2, 65 P.S. § 66.2. An "agency" is defined as: "Any department, board, or commission of the executive branch of the Commonwealth, any political subdivision of the Commonwealth, the Pennsylvania Turnpike Commission, or any state or municipal authority or similar organization created by or pursuant to a statute which declares in substance that such organization performs or has for its purpose the performance of an essential governmental function." Id. § 1, 65 P.S. § 66.1(1) (emphasis added).*fn8

[ 448 Pa. Page 428]

In order to satisfy the statutory definition of a state "agency", appellants must show that Temple is

[ 448 Pa. Page 429]

    a "State or municipal authority or similar organization. . . ."*fn9 We must reject the contention that Temple, a non-profit corporation chartered for educational purposes, has become "similar" to a "State or municipal authority"*fn10 solely because of increased financial assistance from the Commonwealth.

[ 448 Pa. Page 430]

Temple was originally chartered as a non-profit corporation for educational purposes in 1888.*fn11 In 1907 the charter was amended to accord Temple university status.*fn12 In 1965, the Legislature passed the Temple University-Commonwealth Act.*fn13 The act amended Temple's corporate charter "by changing the name of Temple University to 'Temple University -- of the Commonwealth System of Higher Education . . .'"*fn14 and further declared it "to be the purpose of this act to extend Commonwealth opportunities for higher education by establishing Temple University as an instrumentality of the Commonwealth to serve as a State-related institution in the Commonwealth system of higher education."*fn15 More important, the act also provided that Temple "shall continue as a corporation for the same purposes as, and with all rights and privileges heretofore granted to Temple University. . . ."*fn16

We conclude, as did the Commonwealth Court, that this latter declaration reveals an express legislative intent to preserve Temple's status as a non-profit corporation chartered for educational purposes. The receipt by Temple of increased state financial aid no more transforms Temple into a state "agency" than the receipt of federal funds can make Temple an agency of the federal government. A review of the Temple University-Commonwealth

[ 448 Pa. Page 431]

Act further supports our conclusion.

Appellants rely on various provisions of the Temple University-Commonwealth Act to bolster their contentions. They emphasize that the act altered the board of trustees by providing for appointment of four trustees respectively by the Governor, the President pro tempore of the Senate, and the Speaker of the House.*fn17 Nevertheless, these twelve Commonwealth trustees remain only a one-third minority of the board's total number of thirty-six trustees.

The majority of non-public trustees clearly retains the powers to manage and control the University. The act in its legislative findings describing Temple's status prior to passage of the act specifically declares that "Temple University owns and maintains land, buildings, and other facilities which are used, together with land and buildings owned by the Commonwealth of Pennsylvania, for higher education, which land, buildings, and other facilities are under the entire control and management of the board of trustees. . . ."*fn18 The Legislature then expressly directs that "[t]he entire management, control and conduct of the instructional, administrative, and financial affairs of the university is hereby vested in the board of trustees."*fn19 Additionally, the act provides that "[t]he board may exercise all the powers and franchises of the university and make bylaws for their own government, as well as for the university."*fn20

[ 448 Pa. Page 432]

The act also directs that "[i]n accordance with legislative appropriations made as provided by law, the Commonwealth may, by agreement with the board of Page 432} trustees, acquire lands, erect and equip buildings, and provide facilities for the use of the university."*fn21 Had the Legislature intended to transform Temple into a state "agency", it would be hardly necessary to require that the Legislature reach an agreement with the board of trustees before it can expand or alter Temple's facilities. This requirement further supports the conclusion that Temple is not a state "agency" for present purposes.

Appellants also rely on fiscal controls, provided by the Temple University-Commonwealth Act to facilitate Commonwealth inspection of the University's expenditures of Commonwealth funds, to support their contention that Temple is now a state "agency". We are unpersuaded.

The Temple University-Commonwealth Act has clearly authorized increased financial assistance to Temple from the Commonwealth. The Commonwealth is obligated to provide sufficient funds to enable Temple to maintain the legislatively determined tuition and fee schedules.*fn22 Temple is permitted to participate in Commonwealth programs for capital development*fn23 and to support these programs the board of trustees is empowered to issue tax free bonds.*fn24 It is, of course, a fundamental practice of government that its grants of public funds to an appropriate institution are generally accompanied by some regulatory mechanism in order to insure that the public funds are being properly expended.

The Legislature in this instance provided several ways to assure proper expenditures of its appropriated funds. The act provides that "[f]or the purpose of

[ 448 Pa. Page 433]

    assuring the proper accountability on the part of Temple University for the expenditure of the amounts appropriated by the Commonwealth, Temple University shall establish a Commonwealth Appropriation Account into which only the amounts appropriated by the Commonwealth shall be credited when received."*fn25 It is also required that "proper records" be kept of these accounts and at the completion of each fiscal year the University file with the Auditor General and the General Assembly "a statement setting forth the amounts and purposes of all expenditures made from both the Commonwealth Appropriation Account and other university accounts during said fiscal year."*fn26 The Auditor General is directed to conduct a "post-audit" and his responsibilities are expressly limited to auditing the funds provided by the Commonwealth and maintained in the Commonwealth Appropriation Account.

This regulatory scheme provided by the Legislature to safeguard against improper expenditures of public funds in no way intrudes upon or alters Temple's status as a non-profit corporation chartered for educational purposes. The express limitation of this regulatory scheme to the funds "maintained" in the Commonwealth Appropriation Account is another indication of the Legislature's intention to preserve Temple's prior status, and not to transform Temple into a state "agency".

Finally, we must note that the Legislature has provided for disclosure of Temple's financial expenditures of both its public and private funds. As stated previously,

[ 448 Pa. Page 434]

Temple must file with the Auditor General and the Legislature at the end of each fiscal year a "statement setting forth the amounts and purposes" of public and private expenditures.*fn27 The Auditor General is directed to submit an annual report to the Legislature containing the results of his audits of Temple's expenditures of Commonwealth funds.*fn28 The President of the University is also required to make an annual "report of all the activities of the university, instructional, administrative and financial, for the preceding scholastic and fiscal year, to the board of trustees, who shall transmit the same to the Governor and to the members of the General Assembly."*fn29 These documents provide ample information concerning the expenditure of Commonwealth funds by the University. Furthermore, these documents also disclose the amounts of expenditures of private and non-Commonwealth funds by the University.

We must conclude, from our view of the statutes in question, that the Legislature by increasing its financial assistance to Temple did not alter Temple's status as a non-profit corporation chartered for educational purposes and clearly did not transform Temple into a state "agency" for purposes of the Inspection and Copying Records Act.

The decree of the Commonwealth Court sustaining the preliminary objections is affirmed. Each party to pay own costs.

Disposition

Decree affirmed.

Dissenting Opinion by Mr. Justice Manderino:

Temple University of the Commonwealth System of Higher Education is a state agency subject to the Inspection and Copying Records Act (Inspection Act).

[ 448 Pa. Page 435]

An agency under the Act is: "Any department, board, or commission of the executive branch of the Commonwealth, any political subdivision of the Commonwealth, the Pennsylvania Turnpike Commission, or any state or municipal authority or similar organization created by or pursuant to a statute which declares in substance that such organization performs or has for its purpose the performance of an essential governmental function." (Emphasis supplied.)

The definition includes organizations similar to state or municipal authorities and there is modifying language after the words similar organizations which cannot be ignored.

State or municipal authorities are corporate entities with boards appointed by government officials, performing essential governmental functions by the authorized receipt and disbursement of taxpayers' money. These enumerated qualities of an authority are the essential qualities of an authority. Any organization possessing these same qualities must be an agency as defined by the Act -- otherwise the use of the term similar organization in the Act would be meaningless.

Similar organization does not stand isolated in the definition. These two words are followed by language which describes exactly the current legal status of Temple University. In the language of the definition, Temple University of the Commonwealth System of higher Education was created by a statute which declares in substance that Temple University has as its purpose the performance of an essential governmental function.

[ 448 Pa. Page 436]

The very Act which established Temple University of the Commonwealth System of Higher Education provides that Temple University shall be recognized as an integral part of the system of higher education in Pennsylvania, and designates Temple University as a state related Page 436} university. The Act further states that its purpose is to extend Commonwealth opportunities for higher education by establishing Temple University as an instrumentality of the Commonwealth to serve as a state-related institution in the Commonwealth system of higher education.

The Inspection Act modifies the words similar organization by requiring a statute which declares that the organization performs or has for its purpose the performance of an essential governmental function. The declarations of the Temple University Commonwealth Act are exactly those called for in the definitions section of the Inspection Act.

The Inspection Act does not say that an organization must be identical to a state or municipal authority, it must only be a similar organization and there must be a statute stating that the organization performs essential governmental functions. I doubt if any more similar organization could be legally created in its essential qualities without actually being a state or municipal authority.

I note also that authorities perform essential governmental functions in the field of education -- as does Temple University.

Temple University is, thus, subject to the Inspection Act and the appellants are entitled to relief within the limitations of that Act which provides for reasonable controls to avoid any concern with burdensome informational requests. Information which must be submitted by Temple University to the Auditor General does not exempt Temple University from the Inspection Act any more than authorities are exempt because they too are required to give information to the Auditor General.

The courts have been instructed by the Legislature as to the guides for ascertaining the intention of the Legislature. The Statutory Construction Act requires the courts to be guided by a presumption that the Legislature

[ 448 Pa. Page 437]

    intends to favor the public interest as against any private interest. Act of May 28, 1937, P. L. 1019, Art. IV, Sec. 52, 46 P.S. 552. In this matter which involves the receipt and disbursement of taxpayers' money by an instrumentality of the Commonwealth, the public interest can only be served by favoring the people's interest -- not the interest of the people's representatives.

The order of the Commonwealth Court, sustaining preliminary objections, should be reversed.


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