Lock v. City of Imperial

155 N.W.2d 924, 182 Neb. 526, 1968 Neb. LEXIS 423
CourtNebraska Supreme Court
DecidedJanuary 26, 1968
Docket36640
StatusPublished
Cited by9 cases

This text of 155 N.W.2d 924 (Lock v. City of Imperial) is published on Counsel Stack Legal Research, covering Nebraska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lock v. City of Imperial, 155 N.W.2d 924, 182 Neb. 526, 1968 Neb. LEXIS 423 (Neb. 1968).

Opinion

McCown, J.

This is an action for personal injuries sustained in a plane crash after take-off at the airport near Imperial, Nebraska, on May 28, 1965. The plaintiff was Evelyn Lock, and her husband was the pilot. The only defendants were the City of Imperial, Nebraska, a corporation, and Glenn Packard, individually, and as manager and! operator of the airport. The defendant City of Imperial, by answer and affidavit, established that on April 11, 1960, under the authorization of the Cities Airport Authorities Act, Chapter 3, article 5, R. R. S. 1943, the city created the Airport Authority of the City of Imperial. Since April 11, 1960, the airport authority has had sole and exclusive jurisdiction and authority over the airport and its operation and maintenance. The motion for summary judgment of the City of Imperial was sustained and the plaintiff’s petition dismissed as to the City of Imperial.

The basic issue involved is whether the airport authority or the City of Imperial was the proper party defendant. There is no issue of governmental immunity from tort liability involved. The operation of an airport is a proprietary function and subject to tort liability if the city itself were operating it. Brasier v. Cribbett, 166 Neb. 145, 88 N. W. 2d 235. An airport authority by statute is clearly subject to tort liability. See § 3-512, R. R. S. 1943. The Cities Airport Authorities Act has been held constitutional. Obitz v. Airport Authority of the City of Red Cloud, 181 Neb. 410, 149 N. W. 2d 105.

It therefore becomes necessary to examine the enabling act to determine whether or not an airport authority is an agency or mere instrumentality of the city, or a separate public corporation with ordinary corporate insulation from its creator.

Under the Cities Airport Authorities Act, Chapter 3, *528 article 5, R. R. S. 1943, an airport authority is designated as a body politic and corporate. It is managed and controlled by a board which has full and exclusive jurisdiction and control over all facilities, owned or thereafter acquired by the city for the purpose of aviation operation, air navigation, and air safety operation. The board is designated “a body corporate and politic, constituting a public corporation and an agency of the city for which such board is established.” Initially board members are appointed by the mayor with the approval of the city council and upon the expiration of the initial terms, members of the board are nominated and elected in the manner provided by law for the officers of the city. Extensive powers are granted in the charter set out in the statute. An airport authority’has power to sue and be sued, to have a seal and alter the same at pleasure, and to make bylaws for the management and regulation of its affairs. It has authority to issue bonds, and to levy taxes. It has the power to contract with the creating city or with any other political subdivision of the state. It has power to appoint officers, agents, and employees and fix their compensation. Upon the authority ceasing to exist, all its remaining rights and properties pass to and vest in the city. Any city creating an authority is required to transfer to, the authority any existing airport or any other property of the city for use in connection with it, including real and personal property owned or leased by the city and used or useful in connection therewith. Naked title to real property so conveyed remains in the city, but the authority has the use and occupancy thereof for so long as its corporate existence shall continue. While the act itself makes no specific reference to the method of establishing a corporate name, the resolution of the city council transferring the property of the city to the authority designates the transfer and conveyance to the “Airport Authority of the City of Imperial.”

The plaintiff’s position is that although an airport au *529 thority is designated as a body politic and corporate constituting a public corporation, it is also specifically designated as “an agency of the city for which such board is established.” It is argued that because of incidents of control, the airport authority is merely an agent of the city in the same sense as a municipal department, commission, or board. In essence, the plaintiff’s position is that the airport authority is not merely an agency of the city, but the controlled agent of the city to the extent that the corporate veil and separate entity may be disregarded entirely as though the authority were simply the alter ego of the city.

There can be no real question that an airport authority, duly created under the Cities Airport Authorities Act, has all the basic characteristics and attributes of any corporation. “The distinguishing characteristics of a corporation are that it is an artificial person, a legal entity, capable of acting through its corporate officers and agents, of suing, being sued, of taking and holding property, and of contracting in its own name, and of continuing to exist independent of individuals who compose it.” 1 Fletcher (Perm. Ed.), Cyclopedia Corporations, § 5, p. 22.

In virtually all respects, an airport authority is a municipal corporation in the strict sense of the term. See, 1 McQuillan (3d Ed.), Municipal Corporations, § 2.07, p. 451. But whether it be called a municipal corporation or a quasi-municipal corporation is immaterial. It is a public corporation with all the basic attributes of a corporation, and it is a separate, and independent corporate entity.

“In no particular is the distinction between the corporation and its members more marked and important than in suing and being sued. * * * if the corporation sues or is sued instead of the member, or vice versa, the judgment will afford no decision of the intended cause of action. Judgment in personam for or against the wrong person amounts to little or nothing.” 1 Fletcher *530 (Perm. Ed.), Cyclopedia Corporations, § 36, p. 150.

The problem of whether the Legislature intended the normal corporate attributes and consequent limited liability of the creator is at least partially answered in section 3-509, R. R. S. 1943: “The bonds, notes, and other obligations of an authority shall not be a debt of the State of Nebraska or of the city in which such authority is established, and neither the state nor the city shall be liable thereon, nor shall such bonds be payable out of any funds other than funds of the authority issuing same.”

Whether “other obligations” of an authority, taken in context, were specifically intended to include judgments for torts or not is not decisive here. From an overall examination of the act, it seems evident that the Legislature did intend the normal corporate insulation of the creator from liabilities of the authority, including torts.

Antieau’s Local Government Law, V. 3, Municipal Corporation Law, § 28.05, p. 526, states: “The weight of authority clearly holds that obligations of a supplementary public corporation are not obligations of the parent municipal corporation within the meaning of debt limitations.”

There have been cases holding that a separate public corporation, for some purposes, may be an agency of the municipal corporation or other political subdivision creating it.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Hilt v. Douglas Cty. Bd. of Equal.
30 Neb. Ct. App. 425 (Nebraska Court of Appeals, 2021)
DBT Yuma, L.L.C. v. Yuma County Airport Authority
361 P.3d 379 (Arizona Supreme Court, 2015)
Brothers v. Kimball Cty. Hosp.
289 Neb. 879 (Nebraska Supreme Court, 2015)
DBT Yuma, L.L.C. v. Yuma County Airport Authority
340 P.3d 1080 (Court of Appeals of Arizona, 2014)
Harris v. OMAHA HOUSING AUTHORITY
698 N.W.2d 58 (Nebraska Supreme Court, 2005)
Bargo Foods North Inc. v. Department of Revenue
415 N.W.2d 581 (Court of Appeals of Wisconsin, 1987)
Airport Authority v. City of Omaha
177 N.W.2d 603 (Nebraska Supreme Court, 1970)

Cite This Page — Counsel Stack

Bluebook (online)
155 N.W.2d 924, 182 Neb. 526, 1968 Neb. LEXIS 423, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lock-v-city-of-imperial-neb-1968.