Pierce Oil Corporation v. Phoenix Refining Co

• Decision Date: 17 March 1922
• Docket Number: No. 172,172
• Citation: 259 U.S. 125,66 L.Ed. 855,42 S.Ct. 440
• Parties: PIERCE OIL CORPORATION et al. v. PHOENIX REFINING CO. Augued
• Court: U.S. Supreme Court

259 U.S. 125

42 S.Ct. 440

66 L.Ed. 855

PIERCE OIL CORPORATION et al.

v PHOENIX REFINING CO.

No. 172.

Augued March 17, 1922.

Decided May 15, 1922.

Mr. Preston C. West, of Tulsa, Okl., for plaintiffs in error.

Mr. Justice CLARKE delivered the opinion of the Court.

In 1913 the defendant in error the Phoenix Refining Company (herein designated the Phoenix Company), a corporation organized under the laws of Oklahoma, erected an oil refinery at Sand Springs, in that state. In the same year the plaintiff in error, the Pierce Oil Corporation (herein designated the Pierce Company), a corporation organized under the laws of Virginia, erected a refinery at Sand Springs, and also constructed a pipe line, wholly within the state of Oklahoma, to the Cushing oil field, a distance of 33 miles.

Beginning in 1915, the Pierce Company transported oil for the Phoenix Company through its pipe line from the Cushing field to its refinery, under annual written contracts, prescribing rates and conditions until in February, 1918, when it informed that company that it would not carry its oil on any terms after the 21st of the following March.

Thereupon the complaint in this case was filed with the Corporation Commission of Oklahoma, praying that the Pierce Company be declared to be a common carrier of oil and that it be ordered to transport oil for the Phoenix Company from the Cushing field to its refinery at a charge to be fixed. The Pierce Company, in its answer, averred: That it had constructed its pipe line to supply its own refinery only, and that it was not, and had never held itself out to be, a common carrier of oil; that it had carried oil for the Phoenix Company as a matter of accommodation only; and that to subject it to the duties and responsibilities of a common carrier would result in the taking of its property without due process of law, in violation of the Fifth and Fourteenth Amendments to the Constitution of the United States.

After an elaborate hearing, the Corporation Commission held: That the Pierce Company had carried oil for the Phoenix Company and for various others for several years at rates agreed upon; that its pipe line was the only available and practicable line by which the Phoenix Company could procure oil from the Cushing Field for its refinery; that the Pierce Company, in competition with others, purchased oil in the Cushing field, which it transported to its refinery at Sand Springs; and that it had a monopoly of the oil-carrying business between the Cushing field and Sand Springs. As a result, it was held that the Pierce Company was a common carrier of oil, as defined in the Oklahoma Laws, and it was ordered to carry such oil as the Phoenix Company was then producing in the Cushing field and such other oil as the Pierce Company might have available space or capacity to transport in its line, from the Cushing Field to Sand Springs. Because the evidence was not deemed sufficient no order was made as to rates.

On appeal, the state Supreme Court found that there was substantial evidence to support the order of the Corporation Commission and affirmed it, but it also held that the Pierce Company, having qualified and entered Oklahoma to do business long after the state Constitution was adopted and after the statutes of the state, under which the order was made, were enacted, it would not be heard to contend that it was deprived of its property thereby without due process of law in the constitutional sense. This last conclusion is sufficient to dispose of the case here.

The state of Oklahoma was admitted into the Union in 1907, with a constitution theretofore adopted by the people, which provided for a corporation commission, with large powers of regulation and supervision over oil pipe and other...