Lakehead Pipe Line Co. v. Dehn

• Decision Date: 07 June 1954
• Docket Number: No. 26,26
• Citation: 64 N.W.2d 903,340 Mich. 25
• Parties: LAKEHEAD PIPE LINE COMPANY, Inc. v. DEHN et al.
• Court: Michigan Supreme Court

Page 903

64 N.W.2d 903

340 Mich. 25

LAKEHEAD PIPE LINE COMPANY, Inc. v. DEHN et al.

No. 26.

Supreme Court of Michigan.

June 7, 1954.

F. Norman Higgs, Bay City, for Arthur F. Dehn, Ida Mae Dehn, Frederick J. Dehn, Esther Dehn, Laura Elizabeth Dehn, and Henrietta W. Martin, respondents and appellants.

Hand & Hand, Bay City, for petitioner and appellee Lakehead Pipe Line Co., Inc. Butzel, Eaman, Long, Gust & Kennedy, Thomas G. Long and William M. Saxton, Detroit, of counsel.

Before the Entire Bench.

CARR, Justice.

This case involves the right of Lakehead Pipe Line Company, Inc., hereinafter referred to as the plaintiff, to acquire by condemnation the right-of-way across land in Bay county, owned by defendants as tenants in common, for the construction of a pipe line for the transportation as a common carrier of petroleum products. Plaintiff was organized in 1949 under the laws of the Stae of Delaware. Among other purposes set forth in its articles of incorporation is the comstruction, operation and maintenance of pipe lines for the transportation of oil, together with storage tanks, pumping stations and other facilities used in connection therewith. The Michigan public service commission, by order dated March 19, 1953, granted plaintiff the right to file its certificate of incorporation in this State and to issue securities. Thereafter it was admitted to do business in Michigan.

Plaintiff is presently engaged in the construction of a welded steel pipe line beginning on the boundary line between Wisconsin and Michigan at a point near Ironwood, thence extending across the upper peninsula to the Straits of Mackinac and in a southeasterly direction to a point on the international boundary in the St. Clair river, a short distance south of the city of Port Huron. When completed it will form a part of a system for the transportation of petroleum products from Redwater, Alberta, Canada, to refineries located in or near the city of Sarnia in Canada, and to and from intermediate points. The stock in plaintiff corporation is owned by the Lake Superior Pipe Line Corporation, a Minnesota corporation, a subsidiary of the Interprovincial Pipe Line Company, a Canadian corporation. The last named company owns the pipe line from Redwater to the international border near Neche, North Dakota, and also the portion extending from the point in the St. Clair river south of Port Huron, above mentioned, to the refineries. The portions of the system in this country are owned by plaintiff, the Michigan section being approximately 540 miles in length.

In bringing the instant proceeding plaintiff relied on P.A.1929, No. 16, as amended, C.L.1948, § 483.1 et seq., Stat.Ann. & Stat.Ann.1953 Cum.Supp. § 22.1341 et seq. In its petition, filed in circuit court on September 11, 1953, it averred compliance with the provisions of the statute, claimed that the right-of-way across the land of defendants was necessary for the public use in the construction of the pipe line, and that it had been unable to acquire such right-of-way. An order was sought appointing three qualified commissioners to determine the necessity for the taking and use of the easement and the amount of the damages to be paid.

The answer to the petition, in substance, denied plaintiff's right to maintain the proceeding. Testimony relating to the issues raised was taken before the circuit judge, who came to the conclusion that defendants' objections to the jurisdiction of the court were not well-founded. Plaintiff's corporate organization, the nature of the project in which it was engaged, and its compliance generally with the requirements of the statute were shown. Among other matters, it appeared that plaintiff had made application to the public service commission of the State for approval of the location and construction of the pipe line in question, and that after a hearing, at which certain intervenors contested the granting of the approval sought, an order was entered authorizing plaintiff to construct, operate and maintain as a common carrier a 30-inch oil pipe line as planned. The use of two 20-inch pipes across the Straits of Mackinac was approved, and the commission further directed that plaintiff should comply in all respects with P.A.1929, No. 16, above cited.

In accordance with his conclusion, the circuit judge entered an order appointing commissioners to determine the necessity of plaintiff's obtaining an easement across the land of defendants and to determine the compensation and damages payable therefor. On the 6th of October, 1953, proofs were taken before the commissioners, from which it appeared that plaintiff intended to operate the pipe line as a common carrier of petroleum products, that negotiations with different parties in Michigan had been conducted for the delivery of oil to Michigan refineries, and that the establishment of 'take-off points' for other purchasers requesting delivery in this State was contemplated. Testimony was offered tending to establish that the construction of the pipe line and its operation in the manner intended would result in industrial benefits to the areas concerned. Plaintiff's president testified that in addition to delivering oil to refineries and other purchasers in Michigan the company would be prepared to transport Michigan oil between points in this State, or between points herein and consignees outside of the State, if available therefor. It may be noted in this connection that on the hearing before the circuit judge on the jurisdictional questions raised by defendants the assistant secretary of the plaintiff testified that oil would be transported through the pipe line in intrastate commerce if future production in this State rendered such service possible.

Based on the proofs taken before them, the commissioners concluded that a public necessity existed for the taking of the easement across the property of the defendants, and that a public necessity likewise existed for making the proposed improvement. The total amount of compensation and damages was fixed at $600, divided equally among the owners of the property. On behalf of defendants objections to the confirmation of the report were submitted. It was the position of defendants that plaintiff was not authorized by statute to condemn the right-of-way, that the operation of the pipe line could not be controlled by the Michigan public service commission, that the contemplated business was wholly interstate and foreign in character, and as such not subject to State regulation, and that plaintiff was seeking to take property by condemnation for a private purpose. The circuit judge determined the issues in favor of plaintiff and entered an order accordingly. Defendants have appealed, raising in this Court substantially the same issues presented by their objections to the order of confirmation.

On behalf of appellants it is argued that the act of 1929, above cited, does not authorize the plaintiff to condemn a right-of-way across their property. Emphasis is placed on the fact that sections 1, 3 and 4, of the statute contain the expression 'within the limits of this state'. It is argued that the phrase must be construed as limiting the operation of the act in question to intrastate operations exclusively. Counsel for defendants in his brief expresses the argument as follows:

'It is the position of respondents that the repeated emphasis on the phrase 'within the limits of the state' can mean only that the legislature intended the act to cover transportation from point in the State of Michigan to another point in the State of Michigan, i. e. intrastate transportation.'

The contention of defendants presents an issue of statutory interpretation. The general purpose of Act No. 16 is indicated by its title, which reads as follows:

'An Act to regulate the business of carrying or transporting, buying, selling or dealing in crude oil or petroleum or its products, through pipe lines; to authorize the use of public highways and the condemnation of private property; to regulate the purchase and storage of crude oil or petroleum; to provide for the control and regulation of all corporations, associations and persons engaged in such business, by the Michigan public utilities commission; to define the powers and duties of the commission in relation thereto; and to prescribe penalties for violations of the provisions hereof.'

It will be noted that the phrase on which appellants rely does not appear in the title. The provisions in the body of the act are in keeping with the general purpose set forth therein. The matter of control by the public utilities commission (now the Michigan public service commission) is emphasized, and the obligations relating to the public service imposed on those who seek to take advantage of the enabling provisions of the enactment are clearly expressed. Sections 1, 2, 5 and 6, are of particular significance in determining the legislative intent. Said sections read as follows:

'Sec. 1. Every corporation, association or person now or hereafter exercising or claiming the right to carry or transport crude oil or petroleum, or any of the products thereof, by or through pipe line or lines, for hire, compensation or otherwise, or now or hereafter exercising or claiming the right to engage in the business of piping, transporting or storing crude oil or petroleum, or any of the products thereof, or now or hereafter engaging in the business of buying, selling or dealing in crude oil or petroleum, within the limits of this state, shall not have or possess the right to conduct or engage in said business or operations, in whole or in part, as above described, or have or possess the right to locate, maintain, or operate the necessary pipe lines, fixtures, and equipment thereunto belonging, or used in connection therewith, concerning the said business of carrying, transporting or storing crude oil or petroleum as aforesaid, on, over, along, across,...