Cornwell v. Central Ky. Natural Gas Co.
| Decision Date | 30 May 1952 |
| Citation | 249 S.W.2d 531 |
| Parties | CORNWELL, et al. v. CENTRAL KENTUCKY NATURAL GAS CO. |
| Court | United States State Supreme Court — District of Kentucky |
Squire N. Williams, Sr., Frenchburg, for appellants.
Lewis A. White, Mt. Sterling, for appellee.
This is a condemnation case wherein appellee, Central Kentucky Natural Gas Company, hereinafter called the company, condemned under KRS 278.501 the underground gas storage in appellants' farm of 119.56 acres located in Menifee County. The jury returned a verdict for appellants in the sum of $1000 and they seek a reversal of the judgment entered thereon because: 1. The statute is unconstitutional under which this condemnation is authorized; 2. the instructions given by the court were erroneous; 3. the verdict is contrary to the weight of the evidence.
A brief background of the case will help in understanding it. The company supplies natural gas to Lexington and surrounding towns in central Kentucky. Underlying land in Powell, Montgomery and Menifee Counties at a depth of from 400 to 600 feet is a geological formation of porous rock known as the corniferous lime stratum. Gas was discovered in this formation in 1904 and by 1912 the field was producing sufficiently to supply Lexington and other towns. By 1919 this natural gas supply was seriously depleted, the rock pressure having dropped from 90 pounds to 28 pounds. As an experiment the company purchased natural gas from wells in eastern Kentucky and West Virginia, piped it to Menifee County and pumped it back into the corniferous lime through the old producing wells which had become depleted. Thus, the field in Menifee County which had formerly been a producing one became a storage field. In Hammonds v. Central Kentucky Natural Gas Co., 255 Ky. 685, 75 S.W.2d 204, this court held that when natural gas was stored in natural repositories underground, it was no longer the exclusive property of the one who stored it, but belonged to anyone who recovered it.
This Hammonds opinion made it necessary not only for the company to be the owner of the underground storage, but to make certain that this storage does not leak, else it would be putting gas under lands which could be produced and marketed by others. Through repeated experiments the company extended the original storage field from 18,000 acres to 41,000 acres, all of which it has under lease except appellants' farm in Menifee County, and it brought this condemnation proceeding under KRS 278.501 to acquire that. A jury trial in Menifee County Court resulted in a verdict for appellants of $1.25 an acre per year and 2000 cubic feet of gas annually. The company appealed to the Menifee Circuit Court and on a de novo trial there the jury returned a verdict for appellants for $1000.
The General Assembly in 1948 repealed KRS 278.500 and in its stead enacted KRS 278.501. See Acts of 1948, Chapter 184, p. 433. Section 278.500 provided any company organized for the purpose of constructing, maintaining or operating oil or gas wells, or pipelines for transporting or delivering oil or gas, might condemn lands or rights in lands that were necessary for constructing, maintaining or operating pipelines, and all necessary pumping stations, applicances, etc. The only difference between KRS 278.500 and KRS 278.501 is that the latter extended the right of condemnation to 'recognized underground gas storage fields'.
Appellants concede K.S. Sec. 3766b-1 (which later became KRS 278.500) was declared to be constitutional in Calor Oil & Gas Co. v. Franzell, 128 Ky. 715, 109 S.W. 328, 33 Ky.Law Rep. 98, 36 L.R.A.,N.S., 456, and in Kentucky Heating Co. v. Calor Oil & Gas Co., 146 Ky. 414, 142 S.W. 728. But they contend that KRS 278.501 is unconstitutional in that it deprives appellants of their property without just compensation in violation of Sec. 13 of our Constitution, since the Act does not compensate them for any natural gas that might be under their land. We cannot agree with appellants in this contention. The record shows the company has no right to drill or produce gas from appellants' land and the sole right it gets through condemnation is to store gas it pumps into the corniferous lime stratum in appellants' land. Appellants will not be deprived of their right to drill and produce oil or gas from their land, except they cannot produce either mineral from the corniferous lime stratum, which they must case off should they drill.
The right of eminent domain has been called one of the highest powers of government and is an attribute of society. It is inherent in the...
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EQT Gathering, LLC v. A Tract of Prop. Situated in Knott Cnty.
...held that § 278.502 (and previous versions of the statute) does not violate the Kentucky Constitution. See Cornwell v. Cent. Ky. Natural Gas Co., 249 S.W.2d 531, 533 (Ky. 1952) ("Appellants concede K.S. § 3766b-1 (which later became KRS 278.500) was declared to be constitutional [in Calor a......
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...jurisdictions have held that condemnation of storage strata does not impair ownership right in other strata (Cornwell v. Central Kentucky Natural Gas Co., 249 S.W.2d 531 (Kentucky); United Fuel Gas Company v. Allen, 137 W.Va. 897, 75 S.E.2d Certainly, defendants may offer proof to show that......
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Central Ky. Natural Gas Co. v. Smallwood
...75 S.W.2d 204, there was involved the question of ownership of the gas after its storage. The later case of Cornwell v. Central Kentucky Natural Gas Co., Ky., 249 S.W.2d 531, was one involving the acquisition of a gas storage lease by eminent domin under the provisions of a statute enacted ......
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...acre per year. We think that an established lease value is a fair basis from which to measure market value. In Cornwell v. Central Kentucky Natural Gas Co., Ky., 249 S.W.2d 531, this Court tacitly approved valuation of underground gas storage space by capitalizing a lease value of 50 cents ......