Koontz v. City of Winston-Salem

• Decision Date: 15 March 1972
• Docket Number: WINSTON-SALEM,No. 76,76
• Citation: 280 N.C. 513,186 S.E.2d 897
• Parties: Ann F. KOONTZ, Administratrix of the Estate of Dalton Klutz Koontz, Deceased, et al. v. CITY OF
• Court: North Carolina Supreme Court

Page 897

186 S.E.2d 897

280 N.C. 513

Ann F. KOONTZ, Administratrix of the Estate of Dalton Klutz

Koontz, Deceased, et al. v. CITY OF WINSTON-SALEM.

No. 76.

Supreme Court of North Carolina.

March 15, 1972.

McQuillin, 18 Municipal Corporations § 53.46 (3d ed. 1963), at p. 247, in part, states:

Although there is authority which points to a contrary conclusion, the character of the acts of collecting and disposing of garbage, generally conceded to be governmental functions, is not, it is held by some courts, changed by the fact that a charge is made for the services, or because the municipality derives incidental revenue therefrom.

Conversely, plaintiffs contend that defendant's landfill operation became proprietary when defendant entered into an agreement with Forsyth County to dispose of county garbage for a fee, and when defendant prepared and sold the landfill property for profit.

We examine representative authorities supporting this contention.

In Oliver v. Worcester, 102 Mass. 489, the plaintiff was injured by a fall into an excavated area which was dug incident to improvement and maintenance of a city-owned building. Prior to the repairs, the city had leased the basement for use as a city market. After repairs, the city used the building for city offices, board rooms, and meetings of the city governing body. Also, the city rented space to the county for use as a courtroom. The basement was used for police and jail purposes. In considering defendant's plea of governmental immunity, the Massachusetts Supreme Court held that, due to the receipt of rental income, the city was acting in a proprietary function in the operation and maintenance of the building, and that the doctrine of governmental immunity afforded the city no protection. The Court stated:

'. . . (T)he plaintiff, while walking, using due care, upon a footpath which had been used by the public for more than twenty years, and had been laid out and graded from time to time and prepared and cared for by the town and city of Worcester, and was within the public common which had been used by the inhabitants of the town for a much longer period, fell into a deep excavation, made by direction of a joint committee of the city council, under the authority and at the expense of the city, in the course of repairing and improving a building standing within the common, used by the city principally for municipal purposes, but a substantial portion of which, both before and after the time of the accident, the city leased, and received rent for, either from private persons or from the county, and which was therefore held and used by the city, not for municipal purposes exclusively, but in considerable part as a source of revenue; . . .'

The Court apparently did not consider whether the city actually profited from leasing the building, nor did it discuss or define its term 'in considerable part' as used to describe the rental of the two rooms in the building.

In Duggan v. Peabody, 187 Mass. 349, 73 N.E. 206, the town owned and operated a quarry and stone crushing apparatus. The primary purpose of this operation was to provide stone for use in construction and maintenance of public streets. However during the five-year period prior to the action the town received an average annual income of approximately $441 from sale of crushed stone from the quarry to private users. The Massachusetts Supreme Court held that these facts required application of the principle that 'when property is used or business is conducted by a town, principally for public purposes under the authority of law, but incidentally and in part for profit, the town is liable for negligence in the management of it.' Collins v. Greenfield, 172 Mass. 78, 51 N.E. 454; Neff v. Wellesley, 148 Mass. 487--493, 20 N.E. 111, 2 L.R.A. 500; Worden v. New Bedford, 131 Mass. 23, 41 Am.Rep. 185.

In Haley v. Boston, 191 Mass. 291, 77 N.E. 888, the plaintiff was injured by a wagon hauling ashes picked up by the city from residences for the purpose of disposing of refuse. The city had two ordinances providing for the collection of ashes and garbage. City wagons and personel picked up household ashes properly displayed by residents. The city performed this service for all residents without charge. City wagons and personnel picked up and disposed of ashes from steam engines for a fee of ten cents a barrel--the cost of collecting and removing the ashes. The Court made a distinction in the performance of the two services, and held that in the performance of the service to all of the householders or residents, the city was not liable for the negligent acts of its agents. Plaintiff's suit was barred because the wagon which struck the plaintiff was engaged solely in removing household ashes as no cost to the householder. However, in a dicta discussion, the Court indicated that there would be liability for negligence in the collection and removal of steam engine ashes because the service, even for a fee that equaled only the expense of collection, was 'a matter of contract merely, though doubtless with a view to public convenience.'

In Brown v. City of Sioux City, 242 Iowa 1196, 49 N.W.2d 853, the city, incident to the operation of its municipal airport, leased property to various tenants. Plaintiff, one of the tenants, maintained an apiary on leased property near the airport runways. The city sprayed the runways with chlordane to kill harmful insects. As a result of this spraying plaintiff's bees died and his honey was contaminated. Plaintiff sought to hold defendant liable for negligently killing the bees and destroying the honey. Defendant interposed a plea of governmental immunity. The jury returned a verdict in favor of plaintiff, but the trial judge entered a judgment Non obstante veredicto. On appeal, the Supreme Court of Iowa reversed the judgment n.o.v. on the ground that the city, by receiving income from incidental use of municipal property otherwise properly engaged in a governmental service, became a proprietor and was liable just as a private individual a corporation would be. In so holding, the Court stated: 'A municipality in the exercise of its purely governmental functions, is not liable for negligence. But this rule of governmental immunity is to be strictly construed. . . . Where there is doubt as to whether the city is liable, the question will be resolved against the municipality . . . The city cannot accept and exercise the special against of leasing its property to tenants without assuming the responsibilities and liabilities flowing from that relationship.'

In Guthrie v. City of Philadelphia, 73 F. 688 (E.D.Pa.1896) the plaintiff sued for damages to his boat caused by negligent operation of the city's ice boat. The ice boat was, by ordinance, entitled to receive compensation for breaking ice, but on this occasion was gratuitously clearing ice around a dock in the State of Delaware. There the Court stated:

'The only defense urged is, in substance, that the city was engaged through its agents, in discharging a public municipal duty, and consequently that it is not responsible for the negligence which caused the injury. The answer to this, in my judgment, it twofold, first that the city owed no municipal duty in Delaware, and second that it was engaged in a private service for the benefit of the owners of the dock, for which it was entitled to compensation. It is unimportant that it performed the service gratuitously. . . .'

In Town of Douglas v. York (Wyo.), 445 P.2d 760, the Court held the municipality liable for fire damage resulting from the negligent operation of the town dump. The basis of the holding was that the town was engaged in a proprietary function because it charged citizens a fee for disposing of garbage.

We find the following statement in McQuillin, 18 Municipal Corporations § 53.90 (3d ed. 1963) at p. 367:

The law in regard to liability for torts connected with public property, other than streets and sewers, may be briefly summarized as follows:

1. If an income is derived by a municipality from particular property owned or managed by it, it is liable for negligence in the care and management thereof. This is well settled and there are no conflicting decisions. Moreover, the amount of income is generally held to be immaterial as is, generally, the fact that the income is merely incidental.

In Smith v. Winston-Salem; Thomas v. Winston-Salem, 247 N.C. 349, 100 S.E.2d 835, the city voluntarily contracted with persons outside its corporate limits for disposal by the city of sewage generated in households located outside the territorial limits of the municipality. The city allowed the sewage mains serving plaintiffs to become choked up and sewage to back through the service connections into plaintiffs' homes. On appeal this Court reversed a judgment for the plaintiffs on the then recognized doctrine of variance, in that the pleadings alleged a breach of contract and the proof established negligence. This Court, in discussing the powers of a municipality to serve the general public and the status of a municipality contracting to serve persons outside its territorial limits, stated:

'A municipal corporation, city or town, is an agency created by the State to assist in the civil government of a designated territory and the people embraced within these limits. Lee v. Poston, 233 N.C. 546, 64 S.E.2d 835. Its charter is the legislative description of the power...