OFFlCE OF THE AmORNEY GENERAL OF TEXAR
                                        AUSTIN




                  Bomrebla 0. P. Lookhe&, Chelraen
                  Bmr4 of Insurama ComxdMlOnerP
                  Austin, Texae

                  Dear Slrt




                            Your letter re                nlan of thlr 4rgmtmont
:i>Honorable 0. P. Lookhart, Page 8


       buslnose lnoldent thereto, together with
       suoh othes rlcghta an4 prlvllogeo      ea are
       conferred’ on foreign hor$orntione by the
       laws   of Tesaa, subjeot to ooizplianae wlth
       tho CoAetltutlon and lawa thoroof.’        1ta
       applioation for petit      etatoe, and It 1s
 _,    a faot, that Its grlnolpal offloe In Terse
I      Is in the Praetorion Buil4ing In Dallas,
       Texas; and the application      recite8 al00
        (which is a -Sact 80, far as we are advle-
       cd) tbat it Is et preaeat trnnsaotlng
       buslnese In Tesae 0~1~. The application:
       recites *Its busiAeas.in the State .o?                  a
       Terns ‘ie to be tranaeoted thr6ughout the..      . .. ”
       State*.    Attaohad to Ite application     Ie
       certified   oopy of It8 original ertIoloa
       or incorporation showi% that its prin-               .
       oipal offloe Ie In Dover, XsAt County,
       Delaworo; that its resident agent IA that ,~” . .
       state Is the United, states Corporation
       Cozippany,whose’addreae ita lo-El Dover
       Wean, Dover; .Delaware. Thlsla a ,typI-‘:
       oal Delaware oharter, wherein It Is au-'
                                                                                   ‘.
                                                                               :

       thorlzed not only 'to aot as’ representa-
       tlvee ror hoopltala In e~ouring’emplopeee.
       who desire hoapltal ,aarvloe ana to treat-‘.
       act all. buainom IAOideAbil thereto!, but. ‘~
       It 1s aleo speol~Io4lly     authorlzyl to 40;
       many other thlnge Aot~embraoe4 in lte~
       Texas pernit - ln rPaot, nearly eaythlng I
       and everything throughout the ohromatio. ~.
       soalo oi humaAaAd Oorporata aotivltpi          .
          ‘Its Texas aotivltlos  oonalst ‘.pr;itioi- .. :       .‘. a
        ally or exolusival~ .oi eervlng a.8 agont                    ;.                 ‘...

       E(or in whatever other oa acity the ~faota       :
       horsinaftor rooited ohm,7 in the pronotloA
                                                            :    :        _;


       and oporetion of a hoo$talIzatlon       servioe
       plan for or In oooperatloa vilth St. Paul~s
       Hospital and Dallas biebhodlst Hoe?Ital,
       both of Dallas, Texas.    Heoorde IA the
       Saoreter$ oi Stateva offloe .ehow that eeoh
       of these hoapltala ir Inoorpora~e~:ondsr
       the laws of ‘Tern& aa aharitaUe, an4 .boito-
       oolent. oorpor&tiona with. the p9w.W Or ‘~
Boaoreble 0. P. Lookhert,      Page   3



        aoquirlng,      ersatlng     owning, end oporat-
           lng upon a oharltabis basla a hoapltal
           or sanatorium In the Oity OS Dallae, with
           a training aohool for nureoe in oonnoo-
           tfon tharewltht St. Paul’e lioa?ltel beln&
           own04 and operatad by a Catholio order
 /         known es the Sisters ot Charity, wlth
           Ito ‘Central House’ at Nomandy, Sdlesourl,
          and provldlag that ‘the oorporation shall
          have AO aapital atock*i that Vmmbora
          of thla oorporatIon aro Sleters OP Charity
                . no person can be at any tine a meaa-
          iec OS this aorporation or have any inter-. ’
          oat in It unlese the be a Sletsr OS
          Charity of the same Soolotyt and should
          any nember o? this oorporatlon ceaeo at
      ‘-any time to be a Si8tor OS Chatilty she’
          shall alao aeaee to be a menbar o? thie            . ’ ‘.
          corporation,    and forfeit    all olalm ehe map’
          have oa acaouht OS her ne%borehIp In the
          oorporation.     ‘iu’o fomal aot of rosigiatim
          shall be nooessary on the part of a retired
          or retiring member.        Remma by death or .
          by the Superiora at Noraundy, Mlssourf,
          ahall be aufilolont . The interest of a
         mmbor shall be unaeslgnable an4 ahall not                     ,-
          pass to anyone other than the mernbere of
          the oorporatlon, by beqaeat,       devlae, dea-
          aont, or ooluatary or Involuntary convey-.               :
          Lt~oe’; and the Dallae &!ethcdIst Eoepitel
        ‘likow+m hae a charter provldine;..that *sat&
          oorporatlon la iormed for benevolentand
         .charltable purposes.        It ehall have 00        ’
          oapltal~ stock..     . . It shaU never pay
          dlvldonde or profit.8 to anyone, but all ’
          fund8 derlvinic from the aonduot of It8             ” -“.
          buslneee ShalLbe used 40 pay qxpoasei aa4
          for repair8 an4 exteneions . . . this char,.~ .”
          ter lo taken out ,IA oonformlty with reao-. ~,’
          lutlone adoptad by the North Texata Anaua&.~
          Conferenoe of. the Xethodlet Epleoopal
          Church South, In eeseion on Ootober        29, .~i
          1920,   and ‘the efiaira oOmn%e shell be
     - direotsd by thfrtoen trustee8 land shall
          be under the oontrol, an4 awuerehip .Q$ the
        above   nam34   Earth Tqyar   @pal    ~QonSrrena6         .
Xonorable 0. P. Lockhart, Pam 4


       hnd sudb othar annual ~onl’orenoos of
       such 2othodIet Eplsoopal Churoh South
       as may hereafter be porraittod to par-
       tlcipatb by ml4 North Texas Annual
       Conference, and aald Sorth Yexaa AaUual
       Conforonoe and other Conlrrsnoos par-
       tlolpatlng’shall  have the absolute
       right to oonfirm eaah and all the
       trustee8 hereinafter  named, an4 their
       6UCC6660T6ia trust.    50 ,trustee here-
       after appointed shall have the rlzht
       to hoid .offlae if OOnfkibatiOA shall
       be refusad by ,eaid Korth Texae Annual
       ConSersnoe or Conferenoes partiolpat-
       Inep,
           *The plan under mhloh the hospltal
        eyetsn mentioned above, Ia operated IO
        aubstsntially Rae rolloWe       NztIOnal~
        Eoapltallzatlon    Spitem, Ino., pre-
  .     sunably adverti+oa Its servloso;       It
        has oovaral aolloltore     who aontact
        prospoote individually     thtiouShout tha
        Stato and aeoure applioatlone whloh
        cm oubtitted at Its biflos;       If the
        Xanageinent,of the System Is oonvl~osd:
        thnt the risk would be aocaptable. to
        the hospital,    the epplloation   Is ‘thed
        by it formrdod tomthe Superintendent
        of the hoapltal Indicated OA the eppli-
        cation toSeth& with a .remIttanoe
        equivalaat to 7Q$ oi the entire pre-
        zlun whloh'i~~aolleoted     b;y the.Spatem*e
        represcntatfYe.for    the ,firiBt monthly,
        qwrterly,     8omI~ahnua1, or ennual
        porlod, aa deoired by the applloadt.
       .The othsr SO$ of the gross premium
         (both initial   and ‘mubaoquont) being rei
        tafncd by ,tho 8yrtetimati, Its ooqggx$tIOo
        or groflt Ifi the anterprloo.
        SU~eriAtQAd'bit or tlWhoepIta1 approvea
        the applicant for membafshlp, he elgns ..
        the forms of poll.oy or aontraot and tie-
        turns lt to fhe Syetem, whIoh then do-,
        llvera It to the appllaaat.       There 18
        eub#Itte4 with thIe letterl ,apeoImea



                                                       .
Bonorabl8 0. P. Lookhart, Peg8 5



       oopy of the form of applioatlon and polioy
       oertlficate    (or othar oontraot) used in
       tha Dallas blothodiat,HoopltaX'e    and of
       the business.     The applioation end polioy
       or oertifioate    used by St. Paul's H~spl-
       tal are ldentfoal Ln form with the speoi-
       men oopy Submitted, exoapt Sor subatitu-
       tion of the name of the hoapltal.
           -The oontraots betwoan the Syatam and
        the two hospitals,   roepaotlvaly, each pro-
       .tiUe that it oan ba roldcd by the hoepl-
        tal on ten days-notice it tho hospital
        disoovers that an‘y provirrions of such
        oontrclot hsve been vlolatod by tha System,
        in which cVaAt'tht3 hoo>ltnl Ohall take
        over and perform all fWtiOA0 formerly            .
        porformad by the Syetera and enJoy all
        bonosita aad -prlviloges formarly enjoyed.
        by tho Systam, and .shall malcoall ool-
        lsotiona thereartsr from the mtunbaro.and
       ratoln 100s of same QB 1ts OWA.      The
        Spat-amagrses.to m&intain a total member-
        ship at each hospital of not lees than
        4,000.or nolo than 5,500, and IS the mern-
        barehlp falls below the miA.li%mor exoaade
       'tha maximum,'it coaatitutss    a violation      ,,,, ~,
        for which the hospital    may take ovoti aa
        above ~iAdiOUt6a. The System wdgaboth.
     ,-&oup~ aAd’indivlaua1     bueinosa.
        group ha0 em msny cm ten members, pr6mlUatii
        can be pald.monthlyg whareaa indl?iduals
        may pay onl;rr on the quarterly    sami-annual;
        or annual basis.    ,Ths aee limit ~:a from
        16 to 50 yeara, and the annual pramium ir '.
        #Q,.OOpar member for,all.ages.
          Wcithgr of th'c hoa~ltals has oompllod,
       or ado any attempt to oomply, with any oi
       the provisions of Article 4590% or of
       Title 78, nor has the NRtlonal’ Hoapitollla-      ”
       tiOA 84rJt03lb,
                     ti0 .v and none of the threa
       corporations of any of their cmployass
       has been 1iOaAaad by thle Dapsrtment to
       conduot aA ilWAl?QA~~business-or .%he
       business of aa insurance a&en%* ,..
         -It ia our opinion that eaoh of the
       hoepltala, severally, and its etipfoyees,
       is oarrping on the bwina%o of group an&
Honorable 0. P. Lookhart,   Page 5


         lndivldual~hoapitallzatIon    lnsurenoa, lu
        ViO~~tiOA of the Statutes of the Btats;
        and .that the Eiatloqal Hospltallzation
        system, Ino., ia engaged in euch hospi-
        talization   iASlU%AO~buslnaaa jOiAtly
        ulth the raepeotlvo hoapltnle in viola-
        tion ,oS auoh atatutoa, or that it an&                   ..
        1ts:amployee~ end the cmployoaa of the
        hoaj1taJ.q nro aotlng aa ineurnnce agents. ,-
        ,(loC&L.zaoordlng yenta and/or sollolton)       .’
        in i@olatloa~oi    the terme of our otat-
        utos;.whloh npoolfloally    forbid oorpora&   :
        tlons frim belly lioensod as lnsuranoa .. . i
        ageate.,
          9% suggtdt that you cowlder what
    beorlng, if any,~ the following statutory             ..
    provisions,. amox& othera, h%ue upon our
    qUsstlonat- Artlolee 459Oa, 4686, 4716,
    5055, 5056, 5058;' 5060, 5OCEa, 5ObEb. ana.~
    506Bb.
          *Aside irom the question oiwhather
    these .three _oorporatlqns and~thelr. employaes
    tme unlawfully operating an lneuranoe busi-
    ness or ths buslnens of lnsuranoe asante,
    it 1s our flaw .also that eaoh of then oorpolra-
    tlone~la~aotlng   ultra tires, uo ab to Justify
    appropriate quo warranto, lnfunotlon, or
    other prooeedings agalnet.them.
          We are aubnittlng herewith in support
    of our views a brief,     whloh, whlla~oot 8x1         I
    haustive, may be’helptul.      /
                   ,..   :       d
          *Plea80 rrao.ise”~:uus~-~ethar’
                                        or nit,’ in
    your oplnlon;‘$ho    &kit& ot faote above duty
    lined discloses ,any vl,ol.atlon of our laws,              . ”
    elthor civil or griminal, or any ultra rlrsr
    act on the ppnrt of. a&l or’any gf the three
    corporationa above' named..
                                                      .
           “If your anf~ner ie la the afflrmatlvs
    wo request, pursuant to ‘the statutes,     that
    you institute   suoh proooealnm as may be
    justlrled,,  and thla Department tendorr to
    you its oooperation in every pos,8lble way
    in OO~~~OtiOA~therWlith.~        ' :   .. ,~
                     \

   Honox%blii 0,&p. Lookhart,, Page.~7 .. .,


       ..       ~.       me -tara Wlnnuran~e~~,i? qefined.ln               Corpus furl*,
   vq; 32,,~3. ,979, .8820il0prw ~.~. ,.  . :. ,_        .,,.  .~i _.,                                      .,
    . .:..
             *13r0eulydQrin9dt insrirtice~~is a. oontr~ct ~:,:.. ..
             *,by whfoh’~one party; for a ooapinsntioh ,oalle.ed.
             -‘thy prami’aq assum% lprtioulhr:ri8kri-of         ths, ,. _. ; . . .
                othm party and promiaoSto.,jap       to himor-hio
                notineo a certain or aaoortainabl+isiimof -.          ..' T .
                Eonap'oa.8.speolflsd..~~ntlngo~oy;       Au rogardm
            "; propsrty~cna~llabllity~fnauronoe,       it is a :          :..-     : -(
                oontract by -6hlch one party protiiaoo. D;na; :-: ..: :;.1'.‘
                oonsldoretion to oonpensate or relrcbursa .tha           :. ; '!..
                other if ha shall aufrar.loas      rr0a~a speoi-     :‘.:.. .:..
                 fled oau~e; or to warant&                  dr in@mnify     or   '. ~..                          .   ;
                 SOCUT        hi12   n&A!&      iOSS   rrOid~'thht'ObS4~     '~.:, '... .,.:.,          .
                 h"~thsom axoegtions, particularly     In the
                 oaae ot~~.ire.i~ur~~e,,lnsuranoe     1s a~aon- : :':.          .                                      ,
                                          T&r.tsm 1fmlrnIl~e ,dI3i -’ .i.’ :. :. ;                                   /
                  tmat orfiadamnityJ                                                                        :
                .not.ee also the aot or iniiurlngbf   the’oontraot            ‘.                                     ;l
                 hore d&hod, as well as the eyetoq oi buel-                                                          /
                 neae of which such oontraets 1~x0ths Bbar- '. -;. :.         .;:
                 aoterletio and vital     aloment.".                              ._                                 i
                                                                               .,(   ;         .
                 Couch on fnsurfmos, Vol.                     1, 690. 2,.,,p. 9, d&a&                   i                ,_
       the word winsuranoe~ aa folrowar
                               .’
....    _.               -*    . :   Strlotly     derh0d;     insuranai) .‘.
                                                                           .j ‘.~;:..:
                       . Is a contraat whereby one ror a oou- 1.:. :
                 k&ration     .agraes to Andemnify another for
                 llabllltg,   donnge, or loso -by perils to whioh ...,'
            .    the subjoat~lnsured.may be exposed.. In *'.            ..~'.'.
                 acolbmt inourance’ it 1s the . . hmlth of
                 the person that la the subject    of i;he.oontraot,.
                         It aleo boo boon sald t&t *the word          .~
                 ~l&aaoe*~      in Boamoo speech and til.th~groprlet~y~.~.'..
                 la uosd quite as’ortbn in. the se586 or oontraot
                 or inaranoe, or act 0r i~~urlng, ae'ili that. 's'.
                 expreoeing the sbotroot, idea oi,,lndemal~y or
                 seourity ag,alnst lons**~
                                                                                                   1
                      -. . .. In this oonnoction it khould be     ~.                       ’            ~“.
                 kmberod     tbat ths oheraoter Or lnsuranoo ii3.                                      'I .
                 not Do be datermind by the charooter of the                             ;-:
                 ooEipanf writI&& It, the nomenclature mod, oc
                 the mnnfu3r or mda or errordingloeurande, butby
                 ths nature of the oontraot aotually entered
                 into or iseued.    In other words, the true
                 oharaotar .of 80 alleged oootraot of inrmraaoe
         oamot ba.ocaoaalod OF ohsn&by       the uao
         or crb~aaOeor worba, it be:n(S. imn5t@ri5lwhgr
         ttier or aot the oontroot on ltu faOe purports
         t0 bs 038 0r m~rr0n00, oifiop th0 00tu-t win
         look bnhlnd the tarninology to e@c@rtal5 What
         the parties lateaUe6 to aoaampllah.w
                Artiola 439Oa, ~vrnanlm Aanotsted Clvll Statutes
    euthorhxl    the OrgUdmatibn and.lncorporctloa 0% non-prod
    oor~~orrtlone ror group houg2tsl sorvloa. rC@ aot iurthor
    provldos~in   pnrtt’,
                      That such oorpmtiona'or~nltod
         and o&itid    under tha ~rbvl~lixt@ or tbts
         Aat o~!slX not be ray.ilred by any dopurtzmnt                        i
         of this   Btntb to lost bead, o’e pI;rlgoe
                                                  dapmltr
         wiIScbany depsrtnart of this hut$ tti bagin
         at/or oporatb unaa2 thlo Aot and the prool-
         elono vi Title 78 of the tiavlosd Civil Stat-,
         utas or Toxea or lQe6, ore bsrebp Prrolarad
         inspp3lloeble.t? cor~omt1ozm ar#mlrt~U and/or,
         oporaced under this &tP
               Ibwover, auOh oori;ort&tian@ air@ nubJoct to oo&,ala
    aujmrvision of the Xaturhqea 33opmm3nt or thl9 mbto.        unaer
    tha rm8 otatod     in yourletter,   nom or t&e above ment1oaea
    oorgoratitna are incorpomtod umI*r krttolo #$Oa, nqpr8, w
    as0 attcgtiat;  to opimm ~1140~ounh statute.


.       . .
               *It lo elwmntary, 5140, that 155umno0,
         0thiw t&n'5 thnt or life ana aoaia.f45twhore thr.            .
         result 15 de+th, ie a oontrsot Of indeml.tpg
         anP  thi5,rsg"rdhm           Of th0 fuCucJtttrat  t&O Bum
         t0  bS pia      $a Q,$208a UiTJOO ia ~QdVatlQOrw     (Cite
         iag  ii0uthwoat    iistional    SCU*& \r. 23sployvri3 Xn-
         dvmn~ty Corp., 12 i3. 7:. (2dl lt39, 1913 Fire
         hsmoirition of I?hilaQ@lphla v* fhtiyhmi,              all
         c. fi'. 447: jl)olnwarQlf~un!lnce co. v* txll,
         1r7 8. W. Pas.)
              You hr*va.furniah@d u5 witk 6 oopp oi tb applioablon
    and narvlco ooatraoO oasd by t&s fL*tthodlat       Boe3ltal~ of DalIam,
    Tamu, ana state in oflteot tbst  the itp~llcr~cloas       aad rmvlo~
                                                                          42$l

                                                      .

 EcqOr5bl4 0. 3. Lookhart, a@$. 0



 oan?xaotr used by both or the a.bwa narrad hospita1.r aro ldon-
~-t&xi& enaept 58 t4 the mm44 0r mpplioants, and OS oour40,
 the cm4 of the pertiouler boe;ital   mnking the 64rvloe con-
 trraat is sat forth to. said omtmot~ othsruloe, aa above
 stoted, t30 apglioations and sorvfoo oontraoto era the
 Bfm4. ?ha a~plleation and ti.4 eorvioe aontreot of tho
 Lwhcdlst Eospltal ar Dslfacl, Titxarr, above nontianod, am,
 as r011owsr


                 *;     the undare$~aod        dn hnmby nrako awli-
        cntion        ~or~nenbburehi), in’tho     Xos~dtallzntlon
        pm of tiethouint fioapital 0r Damio, Tonib,                              'i

        thir:u@ al4 z~ttolml Hon~ltalization :~yntrJ!z,
        Inc.,     the autho,rl@       d&ants     and oollmtors-of                 I



        aaoldant, an4 alter rc days rra.3 data or fm-
        traot la cam of 1U~~as.       Should I ohaqe icy                          Ut4lNR, tubad or ovaries ator thhaoontraat haa
beeAiA f&U rOrQ0   $tW 4110@X&r and U>OA 4AtO;c-
SAg the aboon aa6 r0u0es     yewh




                                *   to   uaauat   my    due0     e0oh




             ‘.
ma, ad&rsa                                        or this applialitton
                                                  and that any verbfil
                  ;                               p~otises or rapTt-
                                                  WAtatiOA8 W&3 by
                                                  eIth%C pwtp ara shore         j
                                                  mad now wafooil.
Bus. ?bqAs                 Zen. mume -..          Si@Md iA dupUaats.
                      .~
                                                  n&l              day oi
Fiitneso a                                                ---a      194~




                                                                            .
Bmrable   0. I?. Loomrt,      Pa$e 11

                            “Raaarkar                       *‘.
                                                      ..’
                                                      I
                                              .
    BOFVLQb
          Cantrcot:
               TlALLbs YI:~I’IEDISTEO51WL
                                     ‘.
                                        b?uabsr
          l?oc-Tmnof arable      i’.
                      *sLT~vICB
                              ~UO~~CT
         *me ~mxmT     ~mxx4L:0r     &dZae, horalaaftar
    deoigmoa  a5 '~Ot3~~tfll',.A@rOS acd OOAtractr with
    .
                                   rr02d
    llor01nartar uoal~natad 66 'ulsbO):' iu oonaldaratlan
    of ppmnt 0r duo13in ci,dvanoa~to air duly author
    izod apmtfi ‘If;: KZ2ICLtr.LX03iTiMXATXC~i iXCT!&t XETG.,.
    iA hStAlbii!lAtS 40 OfJl-60~U>OA WhOAUil;AiIlS A~&-
    oatton, to give @aid Yoinbcr the lollowln& Ilo~pltal
    EiSFViCS,  UPOA CiUthO&YiWZtiOA4f 0Uf.d ]XQGbOf'BdOOtOr,
    who aunt bo R nonbsr OS tho IkLlae Count ‘dndtoal
    socibty.    IA coma ‘of 6izw&pAsy bkmbor pi s 2 bo mm-
    Oar434 EiXsi+aid ifli&o &~Or@iuiPyflO~z%AQAt     SA&
    will ,bs cmroa far until the Idomber’o doctor    arrive8.

          "!i'h~a S.aVioa        *Atithr, ibosibw to a
                            Co-atraot
    prlvtita,   or oorai-privuto
                              roan (1~0s not to 0X000a                :
    &OO    gor Jug), opratlng  room, onnuthotlan,     aen-
    oral -?ursiq, auroing ouporrlolon,   taohnlclsno,      ~.
    Glutltluao, mulll. routine nodicino,    aur(;loal
    au~pW~e, rcutlna lnboratoxy work, ona all other
    uoual hos~ftnl morvlcs during          e gerfod Or hoop*- .
    talizntfon~not          to oraoad twenty-mis hoapltel doya
    durfq the ooatxr.ot year, 4mwvor, artor Uasbor
    burr unad the f;weuty-41x5         diaya allowfed, in 0680
    furthar hospltnliix~fian ia rraooaoary, e 33 l/W
    dlcacunt tram regular          prloeo wtL1 bo 6lvoa fop
    an oddltlannl thirty days. Thio doea NOTin-
    oludo dootors* tram, praoarlptlonsnrlttsn by
    r.:mtor*ndootor or on MS ordora, nor the rorvlae
    or a apeolal pxivata mrue, nor x-rays, owtwn
    tnnta,   phyalothrrnyy,        intmvanhu8     aadloineo
    anti-toxlua,        *nooiaoo, OortImUo nqr opeolal      bbtprw’
    tory wot$c.
        l3t lr furthor qmod tha8    in b&e OvWt *he
    mwnbrr sufrora an aooideat outside or Xhllrr
       coouty, Toxee, ana lt lr aoaoemrp to hava
       iz~;r?oUintohorrpltull!mtloa,  the hoapical a&mar
       to rdnburno the nszbar $0 the 4lXtOAtof
       VW.
       t= 00 p4r   sty up0fi  r000igt or tpritt0n proof

.
       fro: tha hoepital wCnr4 the mttabqr was ooa-
       Fijian      hOw0V~r,      in    A0   4tvOAc dOCrIB thb   Oh144
       oovcr r:ora thnn tho tvmnty-oao  (El) horpitnl
       Coya all~otnb thr moubar durlrrg eny 011aoonttgat
       ycur4
            “Ii all the privuts                or oaniprivoto room8 of
      tho lioi~pital are oaou~l4cl  4t  tha tiso timber
      13 oztarad (ro a patlent,   thou Sxaber oaroos to
      lo ;~leoud telporsrily    in(L r9oa Of ditforont
      01333 until such rooa lr    avellablo.     Eombm
      a&~ooe to be aovt\dat tho ojbtionOS the t!oepl-
       tsl. IT tho kw~bor ia furalehad a aamlprtvatr
       (two or,thros bade) room     the tarmn of this
      oontraot nro thornby ant&Sod.          Mwxber la
      eubjmiti to regular ohorgra in ttifaliorp~tnl rftnr
      MS doctor hak filvnn 8n atdrr for hir di~MWy$r
      frm the Ito8~ft~al. yor 4~11ohnr*a* mnO*b
      the tloopitnl fcr.asrvloe   ~(10 oovnrad by thf 8                      I

      oontruota the Qmbar agrooa td pay tha Iioopital
      oaoh UpOU dO3UAd8Ad ir? A0 OVAAtlAt4W tbA
      upon maaI& tha SIoopltal.        PstlZura to pay
      ouoh chargad UPOAOX'before lOJWfA6 t&a &38gi-
      tal autorntical~    tsrdAato0 thS8 OftAtiT6IOt    a8
      of bata of suoh 31sfoult    aAa ~111 a8 thoreto-
      for0  ptria harouuaor ahaiL b* rdtOIiA4a    by tho                 \
      Kospital.
                      ia the
                -Dofeult      pyiaont of au06i for a
      prioa   ot Tfi:S.DPr8 auto!zatlocally oaooe~a thlr
      oontcsot, without mitton notloo to &mbo,er, oad
    * autm rsodvea qftor eaid ton &ya tire eubjaot
      to r@jeotfon by the Eoopitel for any raaaon.
      314 c;COOptCtAOO  by the ilO&Jpital Of B pallt PUO
      lnatallmunt ah011 not be oonatdorerb II u~lver
      of any of the OOAaitiOJUJOS thlo oontfaot,
                "x:0 oorvloe      shall
                             be provided thmb6r for
      Q&Y ChrCelO          airi4030~4~ &A&WYAAr
                                        QfiiUIAQ
      coqdloacfoae ariofqg tharai’rm, avr far tubor-
      OUiOll5, iAtO~fOi?St~OA,QWVOUB afSOraaP0~
      lcmnlty,  vsnercml diooaaes, ayphUlo, auioi-
      Gel 06ao0, or any ~quarantla6blo dlrearo~ nor for
Bo;lorable o-. P. LOc@hmt, PnQo 29


     di6&~5    arm    eu~jic~   op,sratfons   fir tliaoar-
     r1e~a, gbortitn,   or troublatr a&&q        froa thir
     eouroa, nor for ooapllcntlona       arlsiq rm7i
     provicus Oalivorloo;    hawever, a Clo0ounti OS
     50% all1 be nllovmcl oft .th4 ra~uler hospitnt
     cliar~m for e psrlod of twontp-on0 dtiyu for
     RUiJheilmmte as homle, hsaorrhoide, dio~~38
     or operations on the utorue, ~lniboa or ovmlor
     after .tho CuntraOt baa IWW 1~ mll fOrO9 SOE
     ORB year  @Ad U$On entOrb&      tha ~etKWdaR&
     fOllow1~ yamxh




     and flftpfivo   are aooeptabla BEImmbera.      !Fhi8 1.
     Contraat in oubjtot.to  OtlAOillb3tiOAwhen the
     holder reaohca the egaof    ufrty y064~8~ l&or
     doppndont abfldrea under olttstn 9eese of age'
     6re   e;ltitltd       to   P 90$~ctLsaount        rr03 ths m&Llar
     ::oa,"itel~c.hare;zrs, g?ooLQ@d .bdth partntm we
     ncdwro iq cbod stabiliny: aaC pr3vICsd fbrthiti
     thet their oames and agee era lloted on the
     applioation gf khoir ~sirsnt8.          .'   :

          "Aup %?aeberarho mikea fealee nMtssents'c&
     &rCing hl5 0.F her health Qr age kt ti3\0 Of,.
     ai#iinfiapgloistlon all1 not be ttititlsdto ,.
     hOt3pfteliZatiOA tulctrtbla aon$eaat,   The upgli-
     oation whlah %wiber’       is a part,of, ax& ia
                          aigrrr,
     the basis Sor, iaeuanoe  of thie owitraoti,

           ‘In’o~ab of epiOe&o, publlo dtotqtar or ‘_
     other OoAditioAe aa~aolng an ovararowdln& of the
     cepaclty or the lmJIo~dlQt ~ios,?lt01 Of lm.lAxJsto
     auoh a depoa t&t it la uot ;roaslbletb.pro-
     vi&s eaoo~a.Iocatioua, in ouoh want tha UWloUlot
     8bs~itoi          Of %lh'isl a@%@8           t0 rtbtuld hriW#     t&O
     833mxt of          Uu~a,. reooiv~d      f*aa    Jlrtwbor .Qurbg    **   1.
‘i3onorablo 0. El. Loa&trt,       irage 14


      nmlva Liontha lsnwdisroly piaasdixq8 end litoh
      rn~ud 5h211 fully d~leahur;;atha rvoponslhlity                     ‘:
      ol tho 22otbtiipt Hoa,-.itaf
                                 OS PaUeo.    *
           uThla aontroot doaa not a;!;?ly to iadwtrial
      haztdda aoalag untlor tho supmvisfon   of the
     tidiStr;h~ ACOiiont 3onrd. &EbW O$reeO tO
     yay the balunae of the yearly duoa ?hhoAEd"JittOb
     to tha !im~ltal.   It 1s r;sqtilred that  Saber
     leave t:;is Cmtraot et the l&itt~        Cifiao
     wiifle oorSLnad, Corm-eat ~111 be rat’sme u>oo’
     dlsohsrijo.


                              By.'    :
      (SW&)                                         YU~~%rlnt&Ad%Rt*

     '(Gn the rovorii&ds              af'the Oc+'adt):          : '
                                  :
             aI, eho ua94miggad;do               k&&y w&e opgl-.
       cation for mmb4mN.p in tha.hoapLtel.izatlon                   plan ...
       or Uithcalat Ifosvital          of ~Zallna, Toxea, throw&
       t.L3 &lticnal llospft~nllaa~tlon 3ystea, ~ILlO., the '. :
      aut~ori",sd~4~6Rtd,e~d ooll4ctwa~g~                auea, pcry-
                              at the rate oft           75g xonthly~            c
                 x&w-tnrlya $&CO ~itzuipi-~~ually~- $9.00
                    the mnb?irah2$ to booma operai%ve
                        i.mxdlatolp        la CJIM   OS aacldenti
       ~2ndart0r 10 day8 from ant6 of contnot ta am4                            !,
                                                                                 !
       of illnsstr.    .Bhotid I chmse metpmasent employ-
      muat my aornbbraDl~.sh~U'gtaj.:ih              full~f0~&,-4~      low     :L
       as l%ydues or0 p&J. .ilriStZplOyQd            Wi?(bS Of hU6-             t
       bums 1~ &roup are wrlttsc on sari% bosla 66 htls-                        !’
       bands, UC:Qcm cautozmtibal2p cnnasl~ed whm bus-                          :
       bmdta'ooctract          la~04s.     Contrs.ot ot rider       who.
       bacoaos unmiployed houaowifs i? autonutloaily
       cacaollad.      3aTault in gs;Jr;;aAt       Of duas fm tea _.
       days autoM&allY              aanaula tL1w0  Liarvia Contrwt
       Itin to moolvo if aocepted~ if rojeated, mtay
       p2ld  on oppliaatioa will bo sofundsd.                I oertify
       t&t I BP ia good hesrlth and wlthaut ohronlo
       oflzant ~of any Icind.. I undorataad awl ogroa
       ttict r R3Jnot
                    ..- to recaiva
                                 __        kOS~it?X1iZ~t+X3
                                              .-               aervlo*
     . for any 4xlstmG 416oaao. alUmat or indury ROT
       coqllontlocs        ari5i~,tharef+rc;n,       mr for tubor-
       aulosla, lntoxloatim,             a~r~ow dioor&wa, ln-
       oanlty, vsceraal diSetMMr, 0 hilb; euioidal
       oafms, or any q~rant+ssbie              4
                                               0% oaaq aor for
   Xoaorabla 0. P. &ookhort, Pa&cl10


           4loaasos  of or surg;loal opwntlons for nis-
           currlago, abort&a, or troubles tirLsh& frejl
           this sourc0, nor for cv*plicilt.ione orh3ing
           frox ~rcrvl~ua d~olivcrlae; hoc&or, e dicoount                     . . ..
           or 5oi; wlU,brr allqmd. 0rr the r3wla.t hoopi-
           tal c!:br~?afor u poflo6 of tnonty-0no days
           Sor.auch a1lmont.o us bornio,; hormorrholda,
           diaueooo  or oparttloae   on the uforw,  tube4
           or ovarlos attrr'tha    aontmot ho6 bsen in
           lull for00 for on4 yasr ana u;loa ontoring
           the eoooad end following youral
           AgO   m            Duta of lnot fllLlq3P                  194' l?~turo
           Attondl~~' phyololsn              Reforenas
           xho oan vorlry zy tHMma4nto. I fully undnrotonQ
           t&t any false atmtenonts r?qrding   my hoa~lth will
           not ontitlo ce to monbarohip. This a~plioatlon
           bocomea a part of the Eorvicr Contraot en6 18 the
           basis OGwhloh' it 1s lfitiued.
           I iuthortas~                              e!I'4.drduot q, duea saoh
           month.
:_..I,     Xtngloyed by            '- j
         ; orwifoof~                . )
           Xitnea5:
                                     ._:         .kime (print).
                                                  P.m. bbdrera
                              i;apr,aaaatutivo                                          -.
                                                 &f&a p&oAO-.            Ron, ?hone ~
                 The UGdOrsiF~Oa&is read and fully uiidaretanils
           the aontonte of this appllO6tlcat and that any r*rbal
           prixlso4 or rspresontatlons afi5e by olthor party
           ora. hwe and now *iaived. &$Gad ia~Guplloets.    tail8
                        44~    0r~                 , 194-.




    .
              ,Frm the faoitti otnted Ln yaur izrqulry, and frol the
   cxMcatin~     on4 84rvlas.oontrnot  baead thereon, It is oppwent
   tht Ch4 ~~6814GOO Or the @bOVO ?nonttQlird boagLt~lloet&n      stoheine~
                                                                                        4



   1.9 t0 :GbilG~~,: iA QWt, t&: ~OGlb~rS.  6f&GSt OZQWS8iVO OOat
   of hotQlt4liZatloA   ocnti~snoitts~   Ao'~la fho iwtr,,,oi burial
                                                             .   .
                 . ..     'Y'
.
                                                                         -,_
                                                                           435
I                                  I
    R0~0~iblo 0. P. Lookhart, Pa&B i8


    aodoolstions %~h:hare
                        ths runera beGa%ito nre contraatsd to
    bo furnfshod in klad end not piid ln eaah, the bonaflta
    bore ore unoccdltior*ally contmotod to br dltbar  furnlsbsd
    In k?nd tlrou& &oepltrQ servioos and oeaomodutlom           or,
    is tha &ltarnatlvcr.,~l:lo ot\rtci.a l~t~IWae.b~8adup0a   OOA-
    tln:;;cnclos, the q,m~li ‘ihi tho fiooidtal amoe that their
    opticn to rd%nd to the mdmr 113UUQUof uuoh usrvlooe
    8 aacv lo c&ah equivalent td double ttia aUiOU&of duea paid
    for tbo first 12 nonths period.         ih tba e4nlas oontraot
    of both bos~ltam,     it’is  providodr
                                                                                   I
               *. . . tbht in thu 4VeAt the txmbbor
         iwXsro tinacaldvnt ououfdu of &illaa County,                          :   ,,
         hmz,~titb It la tooa~imry to Zriiw i>zaiediato .,                          3
         hoo;j&xlizntion,  the ftoopitol aveer to re-                              ;;
         Imburao t&a wmbsr.to the extant or $5.00 per
         day upm rscoipt of writton aroof from the
         boaphtal. wkero tha m&or MB ooilPinob$ how-
         Qvor, in co event dose this olause oover more
         than t&o tW@Aty+OGo(21) hor2itaf dayo allot-.
         IS%ths aorabbr4urlag any on4 oontraot yoq.4
              x6 quota rrom   03 A. &.~ R. Pi5 fie, follower
              *hother   Or   not ~A.MWOCtfStiDAOr OOt-                                 I
        p0rstlon ia oatrying w tm Inaum~oo bunlnorus
        rx!nt be d4t4miaad by rha pnrtiaulcr Gbjaots
        tvhlch it ham in'?ii-ias,an& not by hbstreot de-
         clnretlonsof la general par:wto to do rote of              1,    ~:
         charity,/80  that, although fha obert4.r of a
         oorporatior deolaraa that fto objwt 1s ‘the
         t;ocwal goob, aad sot indIoiCw1 grofit,*.lt
        my ba daclnred to twctn fnsrurfmoci   Qmmnp.                                i
        And, OS oourse,.Ehtt GIGMby whiah a crozww.Lnp   or    ,’
        .asscclatlon,or ite osrtlfiaatas    or goliolso,
         1s Coolgmte~ io not rI&-ominMilvo of the
         queofion whelkor thci ar;rarrlmM,tn ia &A IA-
         3urmaa4 oozlpuly or ito ountrcxotsare in fla          .~
         ncturo OS In~urhsm aoliciea.       (Citing Scatbarn
         Suratp Coqsmy v* id.wtia, 21 lie X. (8%) 774).
         It is k%lkator5e;1 that t30 term 'fArlirance!'
         nodiero a~g~oero ii% the oontreOt.     *id tha tsrm
         MG WUP, of payzerrt, of the oooeldorGtioA QfO
         not f!itJtloxafAGtivtoof fb, puoation   whothdr the
         contract Is 008 it Ineuraaoa.         @ awy ba ob-
         aorved. al?m, that th@ quastlm %s tie the
                                                                          #,
                                                                          !
Bonorable 0. 2. Lookhnrt, Page 17


       nature   ofthe insuratIoe proeentsd by ein in-
       nurunse contrRct la Aot to be rettled by tba
       nctura ona or~anlzatlm    OS the aesoalatlon,
       but: rut!& by the tsrme snd ohamatar of tho
       contraat ltsolfrn
            Tba two abovs msntionad hoopltnla Rro lnoorpomted
tm ckorltablo a126beAWOkit oorpomtlcne,       and uro a4twilXy
sng;aEod ia the lnrumaacl bualaooa and for profit.    ';2ra irot
etctod in rcur l&tar furthor refl.aot tiskt the I)o~WRre
corporation 4bovo montionod is aotiAg 08 UtjeAt $0X the
hOS~it.ale.
          No have camfully  oonrriderod Title 'It), ~eraon'e
mot&t&d Clvll L'Sxtutos, whloh ocntalns tho rtstutes role
tiva to ~ASUMUCQ  :A this %ats.    iurtiole 4710, VWAOA*LS
knnotated Civil Statutan, aeftnee a health tnaumnoe 00~
pAyus s0110w5t
            *b health imwroaoe aomprmyshall ba deom-
       cd to bo B aorporutlan dol.ng businooe Under any
       ahertax       iavolving      t,he   pRp!ieAt Of Uny UlGoUAtOf
       ClOA6$',Or other          thi.ncf   Of YClttets,aOAditiOAt3dUPOD
       lo&shbmyl;~~oo aP dl.ablUty                due to ridmara 01:


010
             "An UOOi6~SAt  WwaAis       oozqany shall be
       deem4   to bo.a o~rporntl~oo do%ng~bu~lAsas QA~SC
        SAY charter irrVOlVing the p$WHlAtOf SOAOYOX
        other thling 4f vslua, OOAditl4Aod upon the iA-
        jury, Cisabl43eAt OP death of PomOAS XWitit-
      . ing from tmvoling    cw gsnbraf., nOaideAtE   by hAd
        or water."

            IA riota of thu foregoing inote cad statutes appll-
cnble thsroto iis mt Sgrth iA Title 98, Bupra, it la OUX
O~~A~GA that   both ol the shots named hospitals me oaxry-
in& on the bualneae of keatth and/or aooidont iASPraA44 in
004tMVOAtiGA of the hBUr8Aas       &lW Of th%e Dtate RAd that
the abovo nomatlDelawwe oorportr~4a 1s u~Lav$U~y aotrlag
aa thair a&ant.
          You further 84~ it thdrd Ore any ultra v&me ifdt
cr acts ao the &art OS all‘or asp of the tbrar corporation8
rent&mod  iA yoUX bU&ui&Y~.
                 rionoratle 0. 3. X.ookhert,Pago 18


                              It iS   RtAtfid   iA T4XM   $UXiS&rUd6AOb,   Vol.   lo,
                 pe‘   SQ4:
                              ' "Ttierb f8 a plain dlDtldOtiOA betwtan OOZ-
                         poratc, nots whlah nra inoulld. beoauso thoy two
                         toyoal the pororo of tbo oor~omtl~n end lncfo
                         wUch uro iUcs&~l oc ooAtrary to pub110 polloy.
                         TM5 uppoars in the lo&       oc;nmmmnooo ansul46
                         frxi ultra vlrso cab lllo@       tronmotloas
                         raup3otlvoly.     St 1s OOGVt?AblAtto knop thi5
                         dlntlnat2on iA n1r.d by usin& tha exprdasirin
                         *ultra viros' to doal&nota only sots whloh tire
                         5.n 8xCOn8 OS the cor~orato powore 6tnd to dskoa-
                         innto as *lllagnl* those eqta whioh 8 corpora-
                         tlon 16 3xbiitdor; to do. +riCtly      nQeaki~&
                         *the tsrm *ultra vlrfw la uead to dcslgnhto
                       . the acts~of aorgoratlonm beyond the eoopo 41
                         t!xlr powers (18 doflnod by tholr OhPrt6rE or
                         aOt@   Of iACOQO%VitiOA.’   . . .*

                              C,ooic on Corynetlono,      Vol. E, 6t&.Ed.,    p* 1991.,
                 otatm
                             -It. rarely happen5 tbst  tbs atate objeotr
                        to 6%~u&r6 vlrie wt.     Thati it has B right
~..
 ..,.
  .....
      ~.
       ...>..:
          :y-           to oblaot by QUOwuraato'la     utxbubtdl."
                              However,   Artiala 4, %Otioa LT.!otths   Otate d4ASti-
                 tutlon provides that ths'Attornsy Qonoral ohall a8peOl6llp
                 Znqttlza into the ch&xrtar rl@ta of all prlvata oorpom.tlona,
                 and in tho m?maof the Stats take euob cotton la the aourts
                 as nay ba proper to preve.nt any pr1vd.e corpomtionii       Srcm axor-
                 cluing any powor or dematidlng or oolleotlng      any clpeolae of
                 tams,    tolla,   fralghta or wh@?rago;s not nuthorizsd by law,
                 and aball whonsYer suffloteAt 00~60 exlrte,~oaok a~ ~u,&lolal
                 rorielture    of auoh ahartera.
                              It 1s statad la TIMJOYurl&uUa~da,              Vol. 0, p. 8888t
                               Y2ze loglolnture, darlvlne; lta authority
                        from the Oonotitutlon,   har re-muocod these
                        provislbos,   and thoy oow appear la the Hovlmd
                        zitctutes.   T&if8 CWOtiOAOf thU COIMlti,tUtiQA
                        not only ooafura pmora    ug10athe 4ttornoy Oaa-
                        oral,   but it aloo iwooer dutlrrswhloh mu&
                       ~oscr&lo      0.. 3. Lookhort, Puggola


                            ba    porformd         r;bannvor   facts    arioa   WhiOb   call
                            sor tholr porromanab.
                        8
                                   “The duty to laq.ufre into the charter
                            rl;iSto OS private ocrporntione is to the and
            ..              that when in Ido oplnlon it baomcs nooesovry
                            t0 tnk~ 5t8pf4 to pravont the aburre or ooraoratr
                            pcmr, be my do 80. Th:n rl@it orlstrc in tha
                            VC~JI stif~m 0r th0 Ofri00,   aA4 ootid, it has
                            been mild, ba oxumlaed by the httorney Ctenaral
                            in tho ubsenoo oS a oomtitutlonal      provl8lon
                            ex~re;\aly conferring   it.
                                    *The Suprose Court has. srpresnod the be-
                             110: t&t it was not the purgoeo or the oonistl-
                             .tuticn to oonr‘er on the Attorney Goneral the
                            'ri&h%tto l'dAtd,A ~thi4 type Of aqultable ,jWO-
                             ooeaing * l.n every OQOOin whloh u grlvatr car-
                             ~orrrcion my oloroieo a power tot oonforrod by
                             l&w, witkxat roSorea.oe to the qusntlon a.8 to
                             whathar   such aXerCis0    ia hlwtfu]. to ocae iA-
                             torest ceoentlally      gubllc.  ~ccordlngly,   it
                             has boaa utwvllly hlald that ruits      OS thi8
                             c.haracter cannot ba mlntsinsd       WheAprivets
                             right8 alone are lmolv(rd.”
.:.,.:
    :::.::ji:$$:,
              j:‘.’:                 In aupport or the above 6t5~MOAt,   we QuoD~rr0rp
                       ths oaso     or  Stata v* Yamere bfIA B Trust COiQpiurg, a4 al,
                       (sup. ct.     5-9~) 17 8. 81. 00, 45 r0iittw8:
                                                            .
                                     ‘It la not ballavod thnt Z.t wn8 the ptim
                            FOS0,        bg the ssctlor. of the OOnStftUtmj be-
                            roro reSorred to,~to ccmior OAthe attorney
                            ~WlO3'Alth0 @W0r t0 iWItitUt@ alid AdAtaiA
                            an equltsble proactaUlng such ~~3 tble,’ in. every
                            uase 1~ wslch a prlrutcr cor,:omtlon map exer-
                            cm3 a gmw not cwnrorroa by law, without
                            rorortinos to the gu*otioa whothctr auuh axar-
                            else cP :'owor lo hurtfd to mm3 intoraat
                            ossoatlally  giblloa nor is it bell.cvod that
                            it wzs thereby dntondad to ooafor cm him the
                            pow@r to lnstftute   end l%kiEtGfil cults to
                            prevent thd axorolao   at a pwor 130%ooafsrrod
                            Cy hW'CA            WWJ~   OOr>Qr5tibAl3,    eXOq?t   iA Q8908
                            in whlohit lo madetb ~appear
                                                       that the srer-
                            018360r        ma     powal!   will bo hUrEfur to mm3
                            lritsrwt        ssocantially publio.           T&l6 oiarv ir
                             ~orornblo 0. P. Lockhart, z%(zo 80


            .                     tmO~~thi309a by the Oonnoations illtho para-
                       8          tri:ph of the aefltion ot the ooaStltutlOn iii
                                  ahlo:, the g+nnrcll lnnpxa::o ‘whioh 03wla to
                                  be rd?ic~d u;ma 1s foilnd, Sor till those rslat8
                        .         to sistt?ra IA uMch tha publie hwe e diroot
                                  intnroat.   2lie right of t.ha attomey aonaral,
                                ,~.ia bobnlf of the Stato, t&rough tha aourts,
                                  td prevent any private oorpomtlon front
                                  oxoroinin~ r;ny pO;qer not conferred bp loo,
                                  shen t&La is hurtful to tho publfa, or the
                                  aosu@iion of o. frenohiaa, which iix itoelf
                                  1s a publio won& mnaot be queatlanob,
                                  findn0ula axlst from the nature of the of’tlar,.
                                  it tbo abonnoe of e aonatltutional     prarleloa
                                  exproao3y ooAs6rrlAg it**
                                                                                             ,
                                        In view or t&s foregotag authorZtlo6 an& tho faat8
                             otstad in gear lrttun, you are a6vtoad t&?.t it its our op2a-
                             loa tbat the aots  of the above named hoepitn1.s en&a&~ ia
                             the bualneae of beslth inaurai~~o aad the DelaWWe .ooapany
                             iwtiIg$ 96 tlmlx agant as SW& 6n3 ultra vlroa aotis,
         ,+..:~.: :
:::~-:,i.):I:jjj;i...:.:.:




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