Peoples Gas Light & Coke Co. v. Buckles

• Decision Date: 23 March 1962
• Docket Number: No. 36841,36841
• Citation: 24 Ill.2d 520,182 N.E.2d 169
• Parties: PEOPLES GAS LIGHT AND COKE COMPANY, Appellee, v. Roscoe C. BUCKLES et al., Appellants.
• Court: Illinois Supreme Court

Page 169

182 N.E.2d 169

24 Ill.2d 520

PEOPLES GAS LIGHT AND COKE COMPANY, Appellee, v. Roscoe C. BUCKLES et al., Appellants.

No. 36841.

Supreme Court of Illinois.

March 23, 1962.

Rehearing Denied May 23, 1962.

Webber, Balbach & Thies, Urbana, for appellants.

Ross, McGowan & O'Keefe, Chicago, and Barth, Philips, Phebus & Tummelson, Urbana (Clarence H. ross, Joseph M. Wells, Philip A. McKinsey, Chicago, and darius E. Phebus, Urbana, of counsel), for appellee.

SOLFISBURG, Justice.

This matter involves a suit by the plaintiff gas corporation to condemn a subsurface geological strata under the land owned by the defendant for the purpose of storing gas underground. The condemnation suit did not seek the fee-simple title to the property but only the right to inject and withdraw gas from the St. Peter geological formation lying under the 160 acres of the defendants' land. The trial court directed a verdict awarding the defendants the sum of $4000 as just compensation for the taking of this underground strata. From this judgment defendants appeal directly to this court. Ill.Rev.Stat.1959, chap. 47, par. 12. It appears from the record that on March 21, 1960, the plaintiff filed a petition with the Illinois Commerce Commission for an order granting the plaintiff a certificate of public convenience and necessity for the testing, development, operation and maintenance of an underground gas-storage reservoir near the village of Mahomet, pursuant to the Illinois Public Utilities Act (Ill.Rev.Stat.1959, chap. 111 2/3, pars. 50, 56) and the Gas Storage Act (Ill.Rev.Stat.1959, chap. 104, pars. 104, 105). The initial hearing before the Commerce Commission was set for April 21, 1960, notice was sent by registered mail to the record owner of each privately owned tract of land in the storage area against which eminent domain was to be exercised, and notice was given by publication in a newspaper of general circulation, more than 21 days prior to the April 21, 1960, hearing. Pursuant to such notices, hearings were held before the Commerce Commission and on July 29, 1960, an order was entered by the Commission finding that there was reasonable expectation that the St. Peter geological formation in the vicinity of the village of Mahomet had a dome type of structure at approximately 1,650 feet below the surface, which might be utilized for the injection, storage and withdrawal of large quantities of gas. The dome-like structure covered approximately 23,000 acres with the primary area of somewhat less than 5000 acres at the crest of the structure which was to be the area for the initial development as a pilot or test operation. The order of the Commission made findings as to the nature of the geological structure; the absence of coal, gas, oil or mineral deposits in any commercial quantities; that notices had been sent to all landowners whose lands were to be subjected to condemnation; that the use of the gas-storage reservoir will not injure any water resources and will be confined to a geological stratum lying more than 500 feet below the surface of the soil; that the natural gas which is proposed to be stored would be used for ultimate distribution to the public in the city of Chicago and that the public convenience and necessity of a substantial portion of the gas-consuming public in the State of Illinois will be served by such gas-storage project. The order of Commission grants to the plaintiff under section 55 of the Public Utilities Act a certificate of public convenience and necessity to test, develop, construct, operate and maintain a gas-storage project and approves, under and pursuant to the provisions of the Natural Gas Storage Act, the development, construction, operation and maintenance of the underground natural gas-storage reservoir on a pilot operation. The order provides certain restrictive conditions protecting the rights of the owners of lands within the boundaries of the storage area and the public resources of the State, and for the carrying of public liability insurance.

No appeal was taken from the order of the Commission and thereafter on October 18, 1960, the plaintiff filed the present action in the circuit court of Champaign County. The complaint alleged that plaintiff was a public utility and had obtained an order from the Commerce Commission authorizing an underground storage project in the vicinity of the village of Mahomet in Champaign County involving some 4,390 acres and that the plaintiff had acquired, by voluntary grant, the necessary rights to enable it to undertake the underground storage of gas from the owners of the land lying within the test storage area, except as to the 160 acres belonging to the defendants and prayed that the court ascertain and assess the compensation to be paid to the defendants and that plaintiff have the right, privilege and easement to develop and conduct the gas-storage operation under such land.

Following the issuance of summons against the defendants and the disposition of certain motions, pretrial discovery and preliminary matters, the case came on for trial and the plaintiff introduced evidence that the defendants operated the 160 acres as a farm for the raising of grain and livestock, that it was improved with the usual farm buildings, that it was located in a rural farming area and that no oil or gas had ever been produced in the area.

The plaintiff also presented the evidence of three expert real-estate appraisal witnesses who each testified as to the value of the farm before taking and the value after taking, showing that there was a loss in value of $4000. By stipulation plaintiff agreed that its activities would be confined to the subsurface strata of the St. Peter formation and would not involve any part of the surface of defendants' land.

The defendants attempted to introduce evidence that the highest and best use of the property was for the purpose of underground storage of gas and proposed through expert witnesses to show the value or worth of the underground storage easement was approximately $300,000, and that the taking of the easement diminished the value of the defendants' land in that amount. The defendants' evidence to this effect was rejected by the trial court after an extensive series of offers of proof and the trial court directed a verdict, since the only competent evidence which had been allowed to be introduced showed damages to the defendants by reason of the subsurface easement of $25 per acre. Judgment was accordingly entered on the verdict for $4000.

The defendants, appellants in this court, raise numerous grounds for reversing the judgment of the trial court. Basically, these fall into four principal categories. First, the matter of 'jurisdictional proof' (as defendants characterize it) as a prerequisite for the taking of defendants' land. This involves the validity of the order of the Commerce Commission and an asserted lack of certain other 'jurisdictional requirements.' Second, the constitutionality of the Gas Storage Act of 1951. (Ill.Rev.Stat.1959, chap. 104, par. 104 et seq.) Third, errors of the trial court relating to ruling on continuances, discovery and the pleadings which defendants contend denied them due process of law. Fourth, the exclusion of all evidence of value offered by the defendants with the withdrawal of the case from the jury and the direction of a verdict.

Concerning defendants' objections to the judgment of the lower court because of the lack of so-called 'jurisdictional proof,' their first contention is that the condemnation petition does not refer expressly to the statute which authorizes plaintiff to exercise eminent domain. There is no merit to this contention. The complaint states that the right to enter upon and take or damage private property is conferred by the Public Utilities Act and the Gas Storage Act when ordered or authorized by an order of the Commerce Commission. Attached to the complaint is the order of the Commerce Commission which specifies not only the statutes but even the particular sections of the statutes under which the plaintiff proceeded. In determining whether a petition for condemnation sufficiently alleges the statutory requirements for condemning property, the Commission's order attached to the petition as an exhibit must be considered in adjudging the sufficiency of the petition. (City of Chicago v. Central National Bank, 5 Ill.2d 164, 173, 125 N.E.2d 94.) Nor is there merit to the defendants' contention that the project authorized by the Commerce Commission is only a pilot or experimental phase. Wilcox v. Commerce Comm., 23 Ill.2d 432, 178 N.E.2d 873.

We likewise find no substance to the position of the defendants pertaining to the plaintiff's failure to negotiate in good faith. We are of the opinion that an adequate attempt to acquire the property right by negotiation was made by plaintiff. A final letter offering defendants $45 per acre for storage rights was sent to the defendants and no response thereto was received. While such an attempt is sufficient to show adequate negotiation, (Public Service Co of Northern Illinois v. Recktenwald, 290 Ill. 314, 317, 125 N.E. 271, 8 A.L.R. 466; County Board of School Trustees v. Batchelder, 7 Ill.2d 178, 182, 130 N.E.2d 175,) plaintiff's land agent also personally contacted the defendants. It is true that the instrument which the plaintiff first sought the defendants to execute was broader than the ultimate right condemned, in that it involved possible damage to, and entry upon the surface of defendants' land. Nevertheless, on this record, we think plaintiff has shown a good faith attempt to negotiate. The wide spread between the offering price of the plaintiff and the demand of the defendants, based on their differing theories of value for the storage rights, shows that no practical solution could have been reached through further negotiation.

Next defendants urge that the enabling order of the Commerce...