Reeme v. Natural Gas Imp. Dist. No. 2 of Ashley Co.

• Decision Date: 12 January 1970
• Docket Number: 5--5077,Nos. 5--5076,s. 5--5076
• Citation: 448 S.W.2d 647,247 Ark. 983
• Parties: David REEME et al., Appellants, v. NATURAL GAS IMP. DIST. #2 OF ASHLEY CO., Ark., Appellee. Mrs. Chas. RHODES, Appellant, v. NATURAL GAS IMP. DIST. #2 OF ASHLEY CO., Ark., Appellee.
• Court: Arkansas Supreme Court

Page 647

448 S.W.2d 647

247 Ark. 983

David REEME et al., Appellants, v. NATURAL GAS IMP. DIST. #2 OF ASHLEY CO., Ark., Appellee.

Mrs. Chas. RHODES, Appellant, v. NATURAL GAS IMP. DIST. #2 OF ASHLEY CO., Ark., Appellee.

Nos. 5--5076, 5--5077.

Supreme Court of Arkansas.

Jan. 12, 1970.

Crumpler, O'Connor, Wynne & Mays, El Dorado, for appellants.

W. P. (Billy) Switzer, Crossett, for appellee.

HOLT, Justice.

The appellants, David Reeme, his wife and their minor children, brought an action against the appellee to recover damages for their personal injuries caused by a gas explosion. The appellant, Mrs. Charles Rhodes, brought a separate action against the appellee to recover property damages as a result of her house being destroyed by the same explosion. The appellee is a suburban improvement district incorporated and established pursuant to the provisions of Ark.Stat.Ann. § 20--701 et seq. (Repl.1968). As a natural gas improvement district it operates a gas distribution system as a non-profit corporation and serves the residents in the unincorporated town of North Crossett, Arkansas.

The Reemes rented and moved into Mrs. Rhodes's house. The next morning Mr. Reeme went to appellee's office and requested from the appellee's manager that gas service be furnished to his residence. The manager advised Mr. Reeme that he (Reeme) could turn on the gas without the necessity of appellee's representative coming to the home. Mr. Reeme followed the manager's instructions and turned the gas on at the outside gas meter. When Mr. Reeme returned home for lunch, an accumulation of gas in the house exploded when Mrs. Reeme lighted a cigarette. The gas had escaped through an uncapped gas line in one of the bedrooms in front of which a box had been placed during the moving procedure. Each of the appellants, the Reemes and Mrs. Rhodes, alleged that their damages were directly and proximately caused by the negligence of the appellee in failing to introduce into the natural gas a maladorant agent that would indicate by a distinct odor the presence of escaping gas in the building and, further, in failing to make an inspection of the premises to determine the existence of any leaks or the presence of gas in the house. The appellee filed a demurrer to each complaint on the basis that neither stated facts sufficient to constitute a cause of action. From the order sustaining appellee's demurrer comes this appeal.

Appellants first assert that improvement districts had no immunity from tort liability at the time this incident occurred. The appellants admit that 'at one time' improvement districts had immunity from tort liability. This doctrine is predicated on the theory that improvement districts are quasi public corporations which have no powers, duties or liabilities except those expressly conferred by statute. This exemption from liability, unless liability is accepted by a statute, is based upon the sovereign character of the state and its agencies. Board of Improvement of Sewer Dist. No. 2 v. Moreland, 94 Ark. 380, 127 S.W. 469 (1910); City of El Dorado v. Scruggs, 113 Ark. 239, 168 S.W. 846 (1914); Jones v. Sewer Improvement Dist. No. 3 of Rogers, 119 Ark. 166, 177 S.W. 888 (1915). Additional reasoning for non-liability of an improvement district, other than it being an auxiliary of the state, is the lack of funds to pay for tort damages and, therefore, liability could result in bankruptcy with the attendant frustration of the district's intended public purposes.

The appellants, however, argue that by Act 64 of 1929 (Ark.Stat.Ann. § 20--108 (Repl.1968) there is an express statutory waiver of the governmental immunity accorded to improvement districts. Appellants rely upon this language: 'Such districts shall be bodies corporate and shall have power to sue and be sued and to contract by the corporate name.' Should we consider this statute applicable in the case at bar, we still cannot agree with this contention. Subsequent to the passage of this act we reaffirmed the doctrine of immunity from tort liability by improvement districts in Sewer Improvement Dist. No....