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BUTLER COUNTY MEMORIAL HOSPITAL (12/14/76)

COMMONWEALTH COURT OF PENNSYLVANIA


decided: December 14, 1976.

IN RE: BUTLER COUNTY MEMORIAL HOSPITAL, A CORPORATION NOT-FOR-PROFIT. ARTHUR BLACK ET AL., APPELLANTS

Appeal from the Court of Common Pleas of Butler County in case of In Re: Butler County Memorial Hospital, a Corporation, Not-For-Profit.

COUNSEL

Thomas H. M. Hough, for appellants.

James H. McConomy, with him William T. Marsh, and Reed, Smith, Shaw & McClay, for appellee.

President Judge Bowman and Judges Crumlish, Jr., Kramer, Wilkinson, Jr., Mencer, Rogers and Blatt. Opinion by Judge Kramer.

Author: Kramer

[ 27 Pa. Commw. Page 563]

This opinion is limited to the disposition of the jurisdictional question raised by appellee's Motion to Quash. The appellants are alleged to be former members of the Board of Directors of Butler County Memorial Hospital, a nonprofit corporation. The appellee (Frank E. Rath) is alleged to be one of several newly elected directors of the same institution.

The appellee filed a petition pursuant to 15 Pa. C.S. § 7783, praying for an order directing that appellants cease certain actions which interfere with the operation and effectiveness of the new Board of Directors. Section 7783 reads as follows:

Review of contested corporate action

(a) General rule. -- Upon petition of any person whose status as, or whose rights or duties as, a member, director, member of an other body, officer or otherwise of a nonprofit corporation are or may be affected by any corporate action, the court may hear and determine the validity of such corporate action.

(b) Powers and procedures. -- The [commonpleas] court may make such orders in any such case as may be just and proper, with power to enforce the production of any books, papers and records of the corporation and other relevant evidence which may relate to the issue. . . .

Pursuant to Pa. R.J.A. 2156(1),*fn1 the appellee's petition

[ 27 Pa. Commw. Page 564]

    under this section was heard by the Orphans' Court Division of the Court of Common Pleas of Butler County. That court found in favor of the appellee and appellants have appealed to this Court. The appellee has filed a Motion to Quash which questions our appellate jurisdiction.

The appellee's Motion is based on Section 202(3) of the Appellate Court Jurisdiction Act of 1970 (ACJA), Act of July 31, 1970, P.L. 673, 17 P.S. § 211.202, which provides as follows:

The Supreme Court shall have exclusive jurisdiction of appeals from final orders of the courts of common pleas in any of the following classes of cases:

(3) Matters decided in the orphans court division. . . . (Emphasis added.)

Section 202(4),*fn2 however, adds this proviso:

(4) Actions or proceedings in equity, except such classes of appeals as are . . . by any other act of Assembly hereafter enacted within the appellate jurisdiction of the Commonwealth Court. . . .

The appellants argue that the proceeding in the Orphans' Court Division was "equitable in nature," and that 15 Pa. C.S. § 104 is an Act of Assembly subsequent to the ACJA which vests jurisdiction in this Court as

[ 27 Pa. Commw. Page 565]

    contemplated by Section 202(4) of the ACJA. Section 104 reads in full as follows:

Jurisdiction of courts

(a) Equity jurisdiction. -- Except in cases where a statutory remedy is provided by this title, the court shall have the jurisdiction and powers of a court of chancery so far as relates to the supervision and control of corporations.

(b) Appellate jurisdiction of Commonwealth Court. --

(1) Except as provided in paragraph (2) of this subsection or as otherwise provided in this title, the Commonwealth Court shall have exclusive jurisdiction of appeals from final orders of the courts of common pleas in any of the following classes of cases:

(i) All actions or proceedings arising under this title or where is drawn in question the application, interpretation or enforcement of any provision of the Constitution, treaties or laws of the United States, or the Constitution of Pennsylvania or any statute, regulating in any such case the corporate affairs of any corporation subject to this title or the affairs of the members, security holders, directors, officers, employees or agents thereof, as such.

(ii) All actions or proceedings otherwise involving the corporate affairs of any corporation subject to this title, or the affairs of the members, security holders, directors, officers, employees or agents thereof, as such.

[ 27 Pa. Commw. Page 566]

(2) Paragraph (1) of this subsection shall not affect the right of direct appeal to the Supreme Court as provided by law, except that actions or proceedings in equity within the scope of subparagraphs (1)(i) or (1)(ii) of this subsection shall Page 566} not be appealable directly to the Supreme Court under section 202(4) of the Appellate Court Jurisdiction Act of 1970. (Emphasis added.)

If the instant proceeding was a "proceeding in equity" as that term is used in both statutes, the legislative language clearly indicates that this Court should deem Section 202(4) of the ACJA superseded by Section 104, and jurisdiction would properly rest in this Court. If, on the other hand, we hold that the instant matter was a "matter decided in the orphans' court division," as that term is used in Section 202(3) of the ACJA, this Court will be lacking jurisdiction.

The appellants argue that if we decide that Section 202(3) of the ACJA controls, we will be effectively eliminating Section 104(b) from the corporation laws. We disagree. Section 104(b) only removes from the Supreme Court's exclusive jurisdiction*fn3 "proceedings in equity," which, with respect to corporate affairs, logic dictates are proceedings which fall within the "equity jurisdiction" granted by Section 104(a). Section 104(a) grants to the courts of common pleas chancery powers "except in cases where a statutory remedy is provided by this title." Section 7783 is such a specific statutory remedy. We recognize that the remedial provision of Section 7783(b) admittedly authorizes the common pleas court to grant relief which is equitable in nature. Although the statutory language is less than clear, we believe that the jurisdiction granted to this Court in Section 104(b)(2) does not embrace matters decided pursuant to a specific statutory remedy such as that provided by Section 7783, at least to the extent that such matters are otherwise directly appealable to the Supreme Court. In the instant case it is only the presence of Pa. R.J.A. 2156 which provides a basis for Supreme

[ 27 Pa. Commw. Page 567]

Court jurisdiction, and Rule 2156 only deals with nonprofit corporations.

There can be no serious doubt that the instant case was a "matter decided in the orphans' court division," and properly so under Rule 2156. The only viable argument of appellants must be that the instant case was both a "proceeding in equity" as well as a "matter decided in the orphans' court division" and that the conflict should be resolved in favor of this Court having jurisdiction. We cannot agree with this, in light of the existence of a possible interpretation of Section 104 which avoids the necessity of holding that the two provisions of the ACJA, as applied, are in irreconcilable conflict. See Sections 1922(2) and 1933 of the Statutory Construction Act of 1972, 1 Pa. C.S. §§ 1922(2), 1933. We note as well that the first clause of Section 104(b)(2) indicates a desire on the part of the General Assembly that the exclusive jurisdiction of the Supreme Court, if it otherwise exists is to be preserved except in a narrow class of cases.

Accordingly, we

Order

And Now, this 14th day of December, 1976, the Court having concluded that appellate jurisdiction over the above-captioned matter properly lies with the Supreme Court of Pennsylvania, it is hereby ordered, pursuant to Section 503(b) of the Appellate Court Jurisdiction Act of 1970, Act of July 31, 1970, P.L. 673, 17 P.S. § 211.503(b) and Pa. R.A.P. 751, that the above-captioned matter be and hereby is transferred to the Supreme Court of Pennsylvania; and it is further ordered that the Motion to Quash filed by the appellee in the above-captioned matter is dismissed.

Disposition

Motion to quash dismissed. Case transferred to the Supreme Court of Pennsylvania.


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