HAGUE v. CANCER RELIEF & RESEARCH INSTITUTE [1939]

HAGUE v. CANCER RELIEF & RESEARCH INSTITUTE [1939] MJ. No. 19 [1939]4D.L.R.19l

Manitoba King's Bench Dysart J. Judgment: July 11, 1939 (36 paras.)

Counsel: W D. Lawrence, K.C. and S. Freedman, for plaintiff W C. Hamilton, K.C. and H Adamson, for defendant.
1 DYSART J.:--

Ths action is brought by a practicing physician and surgeon to compel the defendant to furnish him from time to time with radium and its emanations for use in his treatment of cancer among his patients.

2 Briefly, the plaintiff claims that the defendant is a corporation incorporated by an Act of the Legislature of this Province for the purposes, inter alia, of acquiring radium and distributing it and its emanations to qualified physicians for use in their treatment of cancer; that the defendant has accordingly acquired a supply of radium ample for these purposes; that the plaintiff is a qualified physician and is entitled to supplies of that radium, and in fact did so get supplies until January, 1938, but that since that date he has been wrongfully and unfairly refused supplies by the defendant; and that he has thereby been greatly injured in his professional practice, reputation and income. He asks for damages and other relief~
chiefly a mandamus to compel the defendant to place his name on the list of physicians to whom it will supply radium needed for treatment of patients.

 3 The defendant takes the position that it has discretion and right to supply or withhold its radium; that in discontinuing supplies to plaintiff it acted in good faith and in its honest belief that the plaintiff is not qualified to use radium It maintains it cannot be compelled by mandamus to meet plaintiffs demands, but that the most the Court can do is to direct the defendant to reconsider the plaintiffs application

 4 Admittedly, the plaintiffs rights, if any, are not founded upon any contract with the defendant, nor upon any proprietary interest in the radium In so far as they exist, his rights are to be found in some statutory duty owing to him by the defendant by reason of the provisions of the Cancer Relief Act, 1930 (Man.), c. 1, as amended by c. 5 of  l936. 5

Before proceeding to deal with this case upon its ''merits,1I I feel that I must point out, as I did in the early stages of the trial that the defendant seems to have no corporate existence whatever. If this semblance of unreality proves to be the fact, the difficulties of disposing of this action satisfactorily will be greatly increased. At the request of counsel for both parties, the trial proceeded subject to this uncertainty. But the difficulties must now be met. 6 Section 2 of the Cancer Relief Act, 1930, reads: 'There is hereby created a corporation to be called 'The Cancer Relief and Research Institute' (hereinafter called 'the Institute'). The Institute shall be a body corporate and politic, and have perpetual succession, with a corporate seal and may sue and be sued, plead and be imp leaded in all Courts whatsoever. II

7 Nothing more is to be found in the Act respecting the creation or the constitution of the Institute. No corporation or members are named or indicated. Unlike other corporations, this Institute is not composed of any constituent elements. Objects, purposes and powers are ascribed to it, but even those do not include power to appoint any governing or managing body of trustees or directors, nor officers, agents or servants. It seems to be nothing more than a name. In itself of itself and by itself it is utterly powerless and helpless.

 8 But the Act sets up an independent body to manage and conduct the affairs of the Institute. Section 3 provides that: 'The Institute shall be governed and managed by a Board of Trustees (hereinafter called 'the Board');11 and s. 8 adds: 'The property, business and affairs of the Institute shall be under the charge, control and management of the Board. II

 9 The powers of this Board are wide enough to enable it to do practically anything that falls within the objects and purposes of the Institute. But the Board is entirely separate and distinct from the Institute. Its member trustees are all to be appointed and have always been appointed by designated authorities and organizations that are wholly unrelated to the Institute. So that this manager of the Institute's affairs is in no way answerable to the Institute for its membership, term of office, duties, or responsibilities.

10 In this set up, it might be thought that the Board is in effect the Institute. I would gladly so treat it, if the Act permitted, but the Act precludes this course. It might also be considered that the Board should be added as a party defendant--at least alternatively--but although I suggested that course to counsel the suggestion was respectfully declined. I am therefore driven to examine furher into the status of the Institute to see how far it can be affected by any judgment or order that might be pronounced in this case; and how far, if at all such judgment or order might bind the Board or its members, none of whom are parties to these proceedings.

11 This inquiry is necessary because of the nature of the judgment the plaintiff seeks. It is not merely declaratory--it is mainly mandatory. But if there is no real commandable defendant before the Court, such a judgment, even if granted, would be of less effect even than "sounding brass or a tinkling cymbal." That would be so unless the Board, of its own accord, would choose to honour the judgment in the name of the Institute. I do not think that the Board could be compelled in this action to obey an order directed against the Institute.

s 12 The Institute, by the Act, is said to be " ... created a corporation ... a body corporate and politic." (s. 2) It is therefore a corporation or nothing. What is a corporation? According to our system of law, a corporation is a group or series of persons which by a legal fiction is regarded and treated as a person itself It is a legal entity composed of persons. In law "a person" is any being that is capable of having rights and duties, and is confined to that. Persons are of two classes only --natural persons and legal persons. A natural person is a human being that has the capacity for rights or duties. A legal person is anything to which the law gives a legal or fictitious existence and personality, with capacity for rights and duties. The only legal person known to our law is the corporation--the body corporate.

13 There are other groups or associations of natural persons which the statute law recognizes, and endows with some personality and some rights or duties, such as registered trade unions, but these are not corporations. In any event they are composed of persons.

14 It must follow that there can be no corporation, that is no legal person, unless and until there is first a group or series of natural persons to compose or constitute the corporation, because although later corporations may be formed of existing corporations, these component corporations in the first instance must consist exclusively of natural persons.

15 Authority for these propositions maybe found in Sahond on Jurisprudence, 9th ed., pp. 416-435; 8 Hals. (2nd ed.), especially at pp. 1-4, and 18-23; and Dillon on Corporations, 5th ed., c. 2; and many others.

16 This Institute is composed of nothing. It is based on nothing. It is nothing. While we must concede to the Legislature of this Province great powers in creating corporations in certain fields, it can exercise its creative powers only upon material out of which corporations can be made. Without such material it cannot create a corporation. It may, like the poet, "give to airy nothing a local habitation and a name," but it cannot give to nothingness a corporate personality with corporate powers. It cannot do the impossible. The purported creation of the Institute is merely an attempt at the impossible.

17 And I may add that this Cancer Relief Act is the only provincial Act that can be found in which this sort of incorporation is attempted. In every other Act creating a corporation or board or commission or institute--and I have examined scores of them--the body so created is expressly declared to "consist of' or to be "composed of' persons. The attempt in this instance would seem to be due less to delberate design than to some oversight.

18 But the Act declares, in said s. 2, that the ''Institute'' may "be sued ... and be impleaded." If that is so, any such suit can be brought home to the Institute only through its Board of Trustees. And that is what has taken place, at least in form The Board has accepted service of the statement of claim, has filed a statement of defence in the name of the Institute, and has stoutly defended the action.

19 Does that mean that the Board would be obligated to satisfy any judgment that might be obtained in this action against the Institute, for instance to obey a mandamus issued against the Institute; and would the members of the Board be individually liable for contempt if they disregarded such a mandamus? Could they be so liable when they are not named as defendants? To answer these questions in the affirmative would seem strange doctrine.

 20 However that is a responsibility that counsel have assumed. Having expressed my views on these teclmical aspects ofthis case, I shall now, in compliance with, counsel's request, deal with the case on its "merits."

21 The objects of the Institute are:
 "(a) To take such steps as may be considered advisable by the Board for the relief or cure of cancer in the Province of Manitoba.
(b) To endeavor to secure for use in the Province of Manitoba an adequate supply of radium, and to erect and operate a radium emanation plant, in the Physics Department of the University and such other plants and apparatus as may be considered advisable, with the hope of making radium available for the treatment of cancer for all citizens of Manitoba who may require it, and to assist hospitals, institutions and -registered medical practitioners in private practice in providing adequate treatment for any of their patients having or suspected of having a malignant disease.
( c) To assist in establishing and operating a clinic or clinics in hospitals or institutions for the examination and diagnosis and/or treatment of persons in the Province of Manitoba afflicted or suspected of being afflicted with cancer. "
( d) To adopt such measures as may be deemed requisite for informing the public generally as to the treatment of and care for persons afflicted with cancer, and to adopt such measures as may be deemed requisite for preventing or minimizing the development or spread of the disease in the Province. "
( e) To disseminate information in such manner and form as may be found best adapted to aid in the control and successful treatment of cancer. "
(f) To issue from time to time such reports, statistics, circulars and other publications as may be deemed advisable. "
(g) To correlate and co-ordinate by voluntary means all agencies in the Province which may have like objects or purposes in view."

22 The Board is empowered to ''make by-laws, rules or regulations" under s. 9, relating to, "
(a)The appointment, functions, duties and removal of all agents, officers and servants of the Institute and their remuneration
 "(b) The time and place of the calling and holding of meetings, regular and special~ of the Board, the quorum, and the procedure in all things at such meetings.
"(c) The conduct in all other particulars of the affairs of the Institute.

" 23 Under s. 15: 'The Board shall have power from time to time to make rules and regulations governing the use and issue of radium, the property of the Board, but shall have no control over any radium which is not the property of the Board, and without restricting the generality of the foregoing such rules and regulations shall provide for the following matters:
 "(1) That no one in the Province of Manitoba shall be deprived of the benefit of  radium treatment through inability to pay.
 "(2) For those who can afford to pay, a reasonable charge will be made to be determined by the Board.
 "(3) That the use and issue ofradium or its emanations should be confined to regularly licensed competent physicians, or institutions who have made a thorough study of its therapuetic value, as well as its dangers.
 "(4) That if the Institute have a sufficient supply of radium it may make radium emanations available for residents of the adjacent provinces at a price to be determined by the Board.

" 24 Soon after the Board was established, a quantity ofradium was purchased by the Board in the name of the Institute, and was paid fur by money borrowed on a $100,000 bond issued by the Board in the name of the Institute and guaranteed as to principal and interest by the Government of Manitoba. Over this radium the Board exerts the only control to which the radium is subject. The Board has no radium of its own. There is no other radium supply in Manitoba, nor nearer than the City of Chicago, U.S.A.

25 About 1930 the Board drew up a ''list'' of the names of 31 physicians to whom the Board thereafter upon application issued radium and its emanations for several years. The plaintiff was on that list. He applied for and received radium and its emanations on many occasions. His qualifications were never questioned.

26 Under the 1936 Act a new Board was set up to replace the former Board. This new Board cancelled the "list," and invited the medical profession to apply to be placed on a new list. Of the 31 physicians on the old list, 20 applied to be placed on the new list. The plaintiffwas among these applicants, but his application and one other were rejected. Four physicians who had not been on the old list also applied, but all four were rejected.

27 The plaintiff says that the treatment committee of the Board refused his application, and the Board confirmed that refusal without giving him any fair chance to be heard in support of his application; that members of the committee and Board did not fairly or fully investigate his qualifications, and wrongfully rejected his application to be placed on the new ''list.'' The defence is a denial of wrong doing, and a justification of the rejection.

28 The great purpose or ''hope'' of the Act is to make "radium available for all citizens of Manitoba who may require it." To that end the Institute and the Board are "to assist .. . registered medical practitioners in private practice in providing adequate treatment" for those citizens.

 29 Citizens who are patients of plaintiff; and who may require radium treatment, are among the beneficiaries of the Act. They have a right to the radium and are not to ''be deprived of the benefit:" s. 15(1). The Board is therefore in the position of trustee of this radiun Not only was the acquisition ofthe radium made possible by the use of provincial credit, but the costs of operation and maintenance are borne chiefly by donations or grants from the provincial treasury, and from certain quasi-public charities. The very name ''Board of Trustees" indicates a trust. The duty of the Board is, inter alia, to issue radium to patients who may require it, and to do so not directly but through physicians. The Board must recognize each patient's right to select his own physician, and cannot interfere in the choice. If plaintiff is so chosen, the Board's duty is "to assist" him "in providing adequate treatment." The Board is not placed in any position of arbitrary power, or even discretionary power. Their duty is to assist practitioners--not to hamper them Practitioners are to point the way; the Board is to follow.

30 The only qualification or limitation upon this duty is that the Board should confine the use and issue of radium and its emanations '~o regularly licensed competent physicians ... who have made a thorough study" of radium (s. 15(3)). In ascertaining what physicians qualify under this heading, competency is a fact to be established in the ordinary way, by evidence. In other words, the inquiry into competency should be conducted along judicial lines, fairly and fully; the physician concerned should be invited to establish his competency, ifit is doubted, and should be given opportunity to meet opposing evidence and argument. The same procedure should be followed in respect of the study qualification of physicians.

 31 From the evidence before me, I am satisfied that, however sincere the members of the Board may have been in their motives and intentions, they did not conduct a fair, adequate inquiry into plaintiffs qualifications. The evidence, upon which they chiefly relied, consisted of case records of plaintiffs cancer cases. These were interpreted adversely to plaintiff although plaintiff was not afforded adequate opportunity to explain them, nor to support them The omissions and errors said to be disclosed in these records are, in the opinion of plaintiffs expert testimony, of trivial or discretionary or speculative importance only. If so, this view might have been presented on plaintiffs behalf It was not.

 32 The opinion of members of the treatment committee and of the Board was greatly influenced by the views expressed by the then Registrar of the Institute, formed upon those records. The Registrar declares that he was guided to his conclusion by the view that no one but surgeons are or can be qualified to administer radium, and that from these records he is satisfied that plaintiff is not a competent surgeon. This conclusion, as might be expected, is contradicted by plaintiff; who holds himself out as a specialist in surgery. But whether plaintiff is a competent surgeon or not, and whether the Registrar's view is sound or not, no such principle or guide is laid down in the Act. The radium is for competent physicians, and no other standard can be justified under the Act.

 33 On the point of special "study," the treatment committee decided that in dealing with plaintiffs application it was necessary to go behind his academic degrees and diplomas, and to ascertain the content of the courses of training and study which the plaintiff had followed in the University of Toronto. We are told that if this inquiry disclosed a satisfactory course of study, the plaintiffs application would be granted and he would be placed on the new "list." For various reasons this inquiry was in fact never pursued, and yet plaintiffs application was rejected.

 34 In saying what I have said about the method or procedure of dealing with plaintiffs application, I express no opinion on the question of plaintiffs competency or study qualifications, but I cannot but remark that plaintiff did not receive at the hands of the Board, or of committees of the Board, that fair, open, impartial treatment, to which he was entitled. He was and is "a registered medical practitioner," "a regularly licensed" physician whose general competency has not been challenged except in connection with his radium application. His "study" qualifications should be examined more fully and fairly before he js denied the benefit of radium under this Act.

35 In view of what I already said, the defendant Institute is not such a thing as can be reached directly by mandamus, and as the Board is not a party defendant in the action it cannot directly be affected by any judgment in this action. The only hope then js that the Board may adopt the suggestion implied as contained in the foregoing discussion and reconsider the plaintiffs application upon its merits, along the lines that I have indicated. The plaintiffs right to any other relief is not established.

The plaintiff should have costs of this action.