Mich. Cent. R. Co. v. Garfield Petroleum Corp.

• Decision Date: 15 March 1940
• Docket Number: Nos. 68,69.,s. 68
• Citation: 290 N.W. 833,292 Mich. 373
• Parties: MICHIGAN CENTRAL R. CO. v. GARFIELD PETROLEUM CORPORATION et al. SAME v. CARPENTER et al.
• Court: Michigan Supreme Court

292 Mich. 373

290 N.W. 833

MICHIGAN CENTRAL R. CO.

v.GARFIELD PETROLEUM CORPORATION et al.

SAME

v.CARPENTER et al.

Nos. 68, 69.

Supreme Court of Michigan.

March 15, 1940.

Action by the Michigan Central Railroad Company against the Garfield Petroleum Corporation and another, and by the Michigan Central Railroad Company against Alice Carpenter and others, to quiet title to lands. From decrees for defendants, plaintiff appeals; cases consolidated on appeal.

Affirmed.

NORTH, J., BUSHNELL, C. J., and CHANDLER, J., dissenting.

Appeal from Circuit Court, Gladwin County, in Chancery; Neil E. Reid, judge.

Argued before the Entire Bench.

Clark & Henry, of Bay City (John J. Danhof and Harold H. McLean, both of Detroit, of counsel), for appellant.

Francis H. Dodds, of Mt. Pleasant, and Hubert J. Gaffney, of Bay City, for appellees.

McALLISTER, Justice.

The above cases were consolidated on appeal.

In 1885, the Saginaw Bay & Northwestern Railroad Company entered upon the lands in controversy, cleared the timber from a right of way, and constructed tracks thereupon. The clearing was 100 feet wide, fenced in on both sides. In 1901, the original entrant deeded the property to the Jackson, Lansing, & Saginaw Railroad Company, and this company in turn conveyed it to the Michigan Central Railroad Company in 1916. During all of this time, the tracks have been maintained and trains operated over the right of way. No question is raised by defendants but what the property has been used and occupied by the railroads for the prescriptive period. The defendants are owners of lands adjoining the strip claimed by plaintiff. Two parcels are in controversy-one a strip 965 feet in length, and the other 1,434.6 feet in length. Each is 100 feet wide. Plaintiff filed a bill to quiet title, and asked that the court decree it to be the owner in fee simple of such lands because of adverse possession. The trial court denied the prayer of plaintiff, but decreed that it was ‘the owner of, with the right to use the surface of aforesaid described strip of land;’ and further adjudged that plaintiff had no right, title, or interest in and to the coal, oil, gas, or other minerals beneath such surface. From such decree, plaintiff appeals.

The only question to be determined in this case is whether a railroad company secures, by adverse possession, an absolute fee in land, over which it lays tracks and operates trains, continuing such user for the prescriptive period. The question is before this court for the first time. Plaintiff claims that it secures an absolute fee to such land by adverse possession; defendants claim that they retain absolute title in the mineral rights, and that plaintiff has only a right of user, similar to an easement.

It is not open to doubt that railroads may acquire titles and interests in lands by adverse possession, and may take an absolute fee by grant. Quinn v. Pere Marquette R. Co., 256 Mich. 143, 239 N.W. 376. But innumerable cases are concerned with the question of what the extent of such interest is, when acquired by adverse possession. In many of the adjudications, the question of what interest a railroad secures by condemnation is discussed; and in determining the extent of interest acquired by user, analogies are drawn to the interests acquired by right of eminent domain. But, because many of such cases depend largely upon provisions of the different statutes and State Constitutions, governing various aspects of the question, they are not helpful in arriving at a determination in the case before us, since our statutory and constitutional provisions are dissimilar, in this respect, to those of other States.

At the outset, it is pertinent to refer to one of the arguments advanced by plaintiff in which it is said: ‘Despite the plaintiff's exclusive possession of the land the trial court held that plaintiff's rights were limited to the surface because the surface was all that the plaintiff actually used or needed in its business. This is obviously wrong, unless railroad corporations are to be treated differently from all others.’

An observation with regard to this contention may be useful in the elucidation of the question: We are of the opinion that railroad corporations are, in a marked degree, to be treated differently from other persons and corporations in regard to the acquisition of land by adverse possession. Property of individuals taken by railroad corporations for the purpose of constructing their road is, in legal contemplation, taken not for private use, but for a public use, and the tenure of railroads in lands condemned for such a purpose is in the nature of a trust for public use, subject to the supervision of the government. In one of the earliest cases in this State, Swan v. Williams, 2 Mich. 427, 439, the court, in upholding proceedings under the right of eminent domain, discussed the delegation of the right of condemnation to a railroad corporation, and the theory upon which such power could be delegated. The court said: ‘The power to delegate the exercise of the eminent domain, to effectuate such purpose, from the universality of its exercise, is no longer an open question. In every instance of turnpike, plank road, bridge, ferry, and canal companies, it has been employed, as well as those of railroads. All this class of incorporations have been enacted upon the hypothesis that the lands taken for these purposes were taken for public use, and not for private endowment, and it legitimately follows that the tenure of the corporation is in the nature of a trust for the public use, subject to the supervision of the government, while its franchises are but the consideration paid for the faithful execution of this trust. It is an equally legitimate consequence, that the object intended must be effectuated, or the grant can be revoked, and the franchise reclaimed. If it be conceded that the prerogative or power of constructing and employing these roads resides in the government, it is difficult to see how the delegation of such prerogative can divest the government of supervision over its exercise. For the purpose of carrying out and effectuating the general purpose, the company may be regarded, as we have shown, as a trustee or agent-entitled to certain rights and immunities, upon a faithful observance upon its part, of the objects and terms of its creation. The right to purchase and hold lands for the purposes of the road, being a right delegated in virtue of the eminent domain of the government, and derogatory to those of the citizen whose property is condemned, must be construed as conferring no right to hold the property in derogation of the purposes for which it was taken.’

The United States supreme court has observed: ‘Railroads are a peculiar species of property, and railroad corporations are in some respects peculiar corporations.’ Union Pac. R. Co. v. United States (Central Pacific R. Co. v. Gallatin), (Sinking Fund Cases), 99 U.S. 700, 722, 25 L.Ed. 496.

The principles enumerated in the various cases, and our statutory and constitutional provisions, may be best considered by having in mind such distinct difference between railroad corporations and other corporations and persons.

If, by right of eminent domain, plaintiff in this case could acquire title to mineral rights, it would be clear that such rights were based upon a showing of necessity, as otherwise there would be no authority for such proceedings under the Constitution. If such rights could not be acquired by condemnation because of lack of necessity, it would disprove a title claimed to be acquired by adverse possession.

‘There can be no doubt that title to surplus real estate may be acquired in a proper case by limitation. The company may upon the same principle acquire an easement by adverse possession. We suppose that where the possession consists in the use of the lands as a right of way an easement and not the fee would be acquired. The general rule is that where an easementis claimed by user the easement can be no broader than the use. The extent of the easement in such case is to be determined by the actual use and posession.

‘Where there is a right to take land for a designated purpose and the land is used for that purpose, the possession will be referred to that right. From this doctrine, which we regard as well founded, it follows that a railroad company, in taking possession of land, will ordinarily take an easement and not the fee, for the reason that right to take an easement is the right to which possession must be referred. The fee is not acquired by possession unless the right to which the possession is referable authorizes the acquisition of a fee. A corporation cannot, by exceeding its power, enlarge its rights.’ Elliott on Railroads, §§ 462, 463.

As provided in our Constitution, private property shall not be taken by the public, nor by any corporation for public use, without the necessity therefor being first determined, Const.Mich.1908, Art. 13, § 1; and the necessity must be a real necessity. City of Detroit v. Daly, 68 Mich. 503, 37 N.W. 11. The statute granting railroads the power to condemn provides that after the necessary proceedings and payment to the owner, ‘the company shall be entitled to enter upon and take possession of and use the said land, franchise, and other property for the purpose of its incorporation; and all persons who have been made parties to the proceedings, either by publication or otherwise, shall be divested and barred of all right, estate, and interest in such real estate, franchise, or other property, until such right or title shall be again legally vested in such owner.’ 2 Comp.Laws 1929, § 11135.

In Re Petition of Detroit, G. H. & M. R. Co., 248 Mich. 28, 226 N.W. 663, 665, the court said that ‘in general it has been held that such land as is essential to the construction, maintenance, and operation of a railroad may be secured by it through condemnation proceedings,’...