Granite Oil Securities v. Douglas County, 3596

• Decision Date: 08 June 1950
• Docket Number: No. 3596,3596
• Citation: 16 A.L.R.2d 1069,67 Nev. 388,219 P.2d 191
• Parties: , 16 A.L.R.2d 1069 GRANITE OIL SECURITIES, Inc., v. DOUGLAS COUNTY et al.
• Court: Nevada Supreme Court

Page 191

219 P.2d 191

67 Nev. 388, 16 A.L.R.2d 1069

GRANITE OIL SECURITIES, Inc., v. DOUGLAS COUNTY et al.

No. 3596.

Supreme Court of Nevada.

June 8, 1950.

Rehearing Denied Aug. 1, 1950.

John R. Ross and Paul Laxalt, boty of Carson City, for appellant.

Grover L. Krick, District Attorney of Douglas County, of Minden, and Ernest S. Brown, of Reno, for respondents.

BADT, Justice.

This appeal presents for our consideration the question, of first impression in this state, of whether a county of this state in exercising a private or proprietary function, under the circumstances and statutory authorization involved, may be liable for damages for its tort. Appellant, as plaintiff below, filed its complaint against Douglas County and others alleging the execution on June 15, 1948 of a lease from respondent Douglas County to Douglas Industries, Inc., whereunder the latter was granted the right to use and operate what was known as Tahoe-Douglas Airport and its facilities from July 1, 1948 to July 1, 1949, and that the lessee thereafter operated said airport for profit under the terms of the said lease agreement. The lease agreement, attached as an exhibit, stated in its preamble that the county was the owner and in control of the airport and desired to secure revenue from said property, and in that connection entered into the agreement. Some of the provisions thereof were as follows:

1. The lessee had the right to the use of said airport and to operate a coffee shop and cocktail bar thereon. 2. It agreed to carry public liability insurance 'in a reasonable amount covering its acts and operations' thereon. 4. The county agreed to maintain the airport and its buildings thereon. 5. The lessee was given an option to renew for an additional year. 6. The lessee agreed to pay $100.00 a month rental. 7. 'The First Party [Douglas County] agrees to install facilities, tanks and pumps for gasoline, and radio equipment at said airport, and the second Party agrees to pay to First Party one cent royalty on all gasoline sold at the airport by the Second Party.' 8. Douglas County agreed to employ a man on full time to perform such work as might be required by both parties. 14. 'Second Party [Douglas Industries, Inc.] agrees to use diligent efforts to promote increased aeronautical activities at the airport, and to secure persons who wish to base their aeronautical activities at the airport, either as fixed-base users or non-scheduled air carriers, or as lessees.' 17. The lessee agreed to keep adequate records and books of account open to the county's inspection and to render monthly accountings. 20. It agreed to carry industrial and accident insurance on all employees and to keep the premiums paid sixty days in advance. The lease also contained numerous protective clauses for the benefit of the county.

The complaint then alleges that by virtue of the contract Douglas County did install facilities, gasoline tanks, pumps and other equipment and employed a man to work in and about the airport, and through its county commissioners entered into a contract with T and T Engineering Company for the purchase and installation of two gasoline pumps with necessary equipment, including electric switches, starting switches, electric motors, wiring, etc., all of which were installed by the said Engineering Company with the knowledge, consent and approval of Douglas County in what was known as a 'gas pit'; and that by reason of negligence in the matter of such installation, the lack of safety devices etc., resulting in a continuous leaking and accumulation of gasoline and explosive gases, an explosion and fire resulted, destroying plaintiff's airplane which was at the time stored in the county's hangar on said airport. Separate and several counts of negligence are alleged with considerable particualrity, and the sufficiency of the pleading in such regard is not challenged. Plaintiff filed a claim with the county, which was disallowed, and the filing of the complaint followed. Damage of $13,000 was alleged for the total destruction of the plane, plus the sum of $5,000 for loss of six months' use thereof. Douglas County demurred (1) for want of facts, (2) for the court's lack of jurisdiction of the county or the subject matter, and (3) 'that the plaintiff does not have legal capacity to sue this defendant.' The district court sustained the demurrer and thereafter entered judgment dismissing the complaint against the defendant county. This appeal followed.

The legislature of Nevada, by Stats.1928, p. 10, passed 'An Act authorizing and empowering any city or county or any town or any municipal corporation in the State of Nevada to acquire land and construct and complete improvements thereon necessary or convenient to the maintenance or operation of airports, the flying and landing of aircraft, and the maintenance and operation of hangars for storing aircraft; permitting use for said purposes of property owned for park purposes; providing for the incurring of indebtedness and the issuing of bonds for said purposes, and for the levying of taxes therefor; declaring such use to be a public use; and matters in connection therewith.' The act is found in §§ 289-293, N.C.L., 1929. Section 1 of this act authorizes any city, county, town or municipal corporation in the state to acquire and use real property within or without its corporate limits upon which might be erected and maintained nesessary airport facilities including hangars, mooring masts, places for flying, taking off and landing of aircraft and the storage of the same when not in active use, together with lights, radio equipment, service shops etc., to such extent as might be necessary or convenient; to levy taxes for the purpose; reciting that lands previously acquired for park purposes might be used for such airport purposes, appurtenances, appliances or other conveniences necessary or useful in connection therewith.

Section 1 of 'An Act in relation to county contracts', approved March 16, 1895, Stats.1895, c. 96, p. 88, had prohibited any member of any board of county commissioners from voting on any contract extending beyond his term of office. Stats.1945, c. 151, p. 239, repealed said act insofar as it applied to airports and permitted the execution of agreements or leases of real and personal property within the counties for use and occupancy as airports, airport facilities, or airport service 'to whom and upon such conditions and terms as they deem proper, for a term or terms not exceeding twenty (20) years.'

In 1947 the legislature of Nevada enacted an act known as the 'Municipal Airports Act', Stats.1947, Chap. 215, p. 713. The title indicates that it is an act providing, among other things, 'for acquisition, construction, maintenance, operation, and regulation by municipalities and counties of airports and air navigation facilities * * *, declaring such to be a public purpose; * * * authorizing leasing of airports, supplying of services in airport operation, * * * authorizing joint action by municipalities and other public agencies * * *; and to make uniform the law with reference to public municipal airports.' As used in the act 'municipality' means any county, city or town of this state. Broad powers are given to such municipalities for the acquisition and operation of airports. Such powers are detailed over many sections and many pages and need not be detailed here. Powers therein given to the 'governing body' are defined to mean 'the governing body of a county or municipality.' Agreements are authorized between any two or more such public agencies participating in the acquisition, maintenance and operation of airports, which agreements may specify, among other things, the proportionate interest of each public agency in the property, facilities and privileges involved, the proportion to be borne by each agency in the costs of acquisition, construction, installation of equipment etc., as well as the proportion of the expense of maintenance, operation etc., and the distribution of the proceeds received and 'the assumption or payment of any indebtedness arising from the joint venture.' The public agencies thus acting jointly pursuant to the authority of the act are further authorized to create a joint board consisting of members appointed by the governing body of each participating agency. The powers of such joint board are defined in some detail and in particular 'such board may exercise on behalf of its constituent public agencies all the powers of each with respect to such airport * * *.' The joint board may enter into leases. Its resolutions, rules and regulations, when approved by the respective constituent public agencies, have the same force and effect in the several jurisdictions involved as the ordinances, resolutions, etc. of each such agency would have in its own jurisdiction. A joint fund is created into which moneys are deposited as provided by the joint agreement. Each of the constituent public agencies must provide its own share of the fund. Federal, state or other contributions or loans, as well as revenues obtained from the joint operation of the airport must be paid into the joint fund, and disbursements therefrom are made by order of the joint board. It becomes important to consider in its entirety § 24 of the act which reads as follows:

'24. The acquisition of any land or interest therein pursuant to this act, the planning, acquisition, establishment, development, construction, improvement, maintenance, equipment, operation, regulation, protection, and policing of airports and air navigation facilities, including the acquisition or elimination of airport hazards, and the exercise of any other powers herein granted to municipalities and other public agencies, to be severally or jointly exercised, are hereby declared to be public and governmental functions, exercised for a public purpose, and matters of public necessity; and in the case of any county,...