Young v. Energy Transp. Systems Inc. of Arkansas

• Decision Date: 10 January 1983
• Docket Number: No. 82-160,82-160
• Citation: Young v. Energy Transp. Systems Inc. of Arkansas, 644 S.W.2d 266, 278 Ark. 146 (Ark. 1983)
• Parties: Thomas G. YOUNG, Appellant, v. ENERGY TRANSPORTATION SYSTEMS INC. OF ARKANSAS, Appellee.
• Court: Arkansas Supreme Court

Page 266

644 S.W.2d 266

278 Ark. 146

Thomas G. YOUNG, Appellant, v. ENERGY TRANSPORTATION SYSTEMS INC. OF ARKANSAS, Appellee.

No. 82-160.

Supreme Court of Arkansas.

Jan. 10, 1983.

Friday, Eldredge & Clark by Michael G. Thompson, Little Rock, for appellant.

Richard L. Peel, Russellville, for appellee.

HAYS, Justice.

Energy Transportation Systems of Arkansas (ETSIARK) is an Arkansas corporation wholly owned by ETSI Pipeline Project, a joint venture--a Delaware partnership formed for the purpose of constructing and operating a coal slurry pipeline from Wyoming to various states, including Arkansas. The partnership consists of five separate foreign corporations, each of which is duly qualified to conduct business in the State of Arkansas. ETSIARK, the appellee, filed a complaint against the appellant, Thomas Young, to condemn a pipeline easement across land owned by appellant pursuant to Ark.Stat.Ann. § 73-1901. ¹ The court below granted the easement.

The appellant raises two points on appeal: 1) the appellee cannot condemn on behalf of a foreign joint venture, 2) the appellee is not a pipeline "company" within the meaning of Ark.Stat. § 73-1901.

It has been clearly settled that a domestic subsidiary of a foreign corporation can be granted the power of eminent domain to condemn on behalf of a foreign parent corporation. Patterson Orchard Co. v. Southwest Arkansas Utilities Corp., 179 Ark. 1029, 18 S.W.2d 1028 (1929); Starr Farms, Inc. v. S.W. Electric Power Co., 271 Ark. 137, 607 S.W.2d 391 (1980). The only issue we are faced with in this case is whether there is any significant difference when the parent company is a partnership and not a corporation. The appellant raises only one possible difference--that corporations, unlike partnerships, are subject to substantially more regulation and control by the state.

We do not find this to be a significant difference in the present case. The firms in this joint venture are a partnership of foreign corporations all authorized to do business in this state. Under the Arkansas Uniform Partnership Act, liabilities of the partnership run to each member individually as well as to the firm as a whole. Consequently should the partnership incur any liabilities, prosecution or suit could be taken against the individual member corporations. Additionally, in affirming a foreign corporation's right to condemn through its domestic subsidiary, we held in Starr, supra, that "the privilege granted a foreign corporation to do business in this state would be practically nullified if it were restricted from doing the act which was necessary to the prosecution of the business ..." We find the principle applies with equal force to this situation--where there are several foreign corporations, all qualified to do business in the state, but operating as the parent company in the form of a partnership.

The appellant next submits that the appellee is not a "company" within the meaning of Ark.Stat.Ann. § 73-1901. He argues that the right of eminent domain cannot be granted without statutory authority, and that the statute granting the right of eminent domain must be strictly construed. He contends that, "company" must be read to mean "corporation". And had the legislature intended others besides corporations to have this right, it would have expressly so stated in the enabling legislation.

While we agree with the appellant's statements on the general principles of statutory authority and eminent domain, we do not arrive at the same conclusion. Basic guidelines for interpretation of statutes provide that we give words their ordinary and usually accepted meaning. Hicks v. Arkansas State Medical Board, 260 Ark. 31, 537 S.W.2d 794 (1976); Canal Insurance Co. v. First National Bank, Fort Smith, 268 Ark. 356, 596 S.W.2d 709 (1980). When the General Assembly uses words which have a fixed and well known legal significance, they are presumed to have been used in that sense. Fernwood Mining Co. v. Pluna, 138 Ark. 459, 213 S.W. 397 (1919). Black's Law Dictionary defines "company" as Union or association of persons for carrying on a commercial or industrial enterprise; a partnership, corporation, association or joint stock company.

Webster's New World Dictionary defines "company" as:

A group associated for same purpose as to form a commercial or industrial firm.

firm is defined as:

1) a business company or partnership of two or more persons, distinguished from corporation in that a firm is not legally recognized as a person apart from the members forming it.

2) popularly, any business company whether or not incorporated.

It is also settled that it is presumed the legislature in enacting the law did so with the full knowledge of the constitutional scope of its powers and of prior legislation on the same subject. McLeod, Commissioner of Revenues v. Santa Fe Trail Transportation Co., 205 Ark. 231, 168 S.W.2d 413 (1943). Ark.Stat.Ann. § 73-115 (promulgated in 1919) provides for the jurisdiction of the Arkansas Public Service Commission and Arkansas Transportation Commission to extend to and include among others, pipeline companies. The statute goes on to read:

And for the purpose of this act, and in the construction of this act, every person, firm, association, company, partnership or corporation or other organizations engaged in the operation of any public utility above indicated, shall be deemed to be a company within the meaning of this act.

Ark.Stat.Ann. § 73-1901 is not part of the Act referred to in the above section, but was promulgated after § 73-115 in 1921. Although in construing a statute reference may be had to other laws on the same general subject matter, Sargent v. Cole, Judge, 269 Ark. 121, 598 S.W.2d 749 (1980), we don't find this argument conclusive in this case. Both statutes deal with the general subject matter of regulation and operation of pipeline companies but regulatory measures could lend themselves to a broader reading, whereas a statute on eminent domain, must be read strictly. However, the eminent domain statute was passed within a short time after the definitional statute, it is of the same general subject matter, and the word in question is commonly used in the generic sense. We don't find this argument dispositive, but we do find it persuasive in reaching our conclusions.

With the above principles in mind as applied to this case we read the word company within Section § 73-1901 to be used in the generic sense. By contrast, to accept the appellant's contention that we read the word "company" as "corporation" would be a strained interpretation. A forced interpretation for the purpose of extending or limiting the meaning should be avoided. See Hicks v. Arkansas State Medical Board, supra.

Appellant also argues that ART. 12 § 9 OF THE ARKANSAS CONSTITUTION² suggests the right of eminent domain is limited to corporations. We do not read that section with such implied restrictions and to do so would be contrary to our interpretation of the general grant of eminent domain to the state in Art. 2 § 23.

By virtue of our Constitution the State's right of eminent domain is conceded, and the legislature as the representative of the State's sovereignty, or the agency to which the legislature has granted the power, has the right to take any kind of private property for public use. Cloth v. Chicago Rock Island and Railway Co., 97 Ark. 86 (1910) and see Eminent Domain 29 CJS § 2, 3. (Emphasis added).

Nor do we agree with appellant's last argument that the legislature in the first instance has no authority to grant the right of eminent domain to individuals or partners. Although there is authority to the contrary, the legislature may confer on an individual or a partnership the power to condemn private property for public purposes. Eminent Domain 29A CJS § 27; Nichols on Eminent Domain 1 § 3.21. We find the statement in Cloth, supra, to be in harmony with this approach, and our legislature has confirmed its agreement by granting such powers to individuals for public use. See Ark.Stat.Ann. § 76-110; 35-801.

ADKISSON, C.J., and HICKMAN and PURTLE, JJ., dissent.

HICKMAN, Justice, dissenting.

This is an eminent domain case and the majority is consistent with past judicial approaches which are liberal and approve most claims of the power of eminent domain. The legislation which is the basis of the asserted power of eminent domain is arbitrary at the least, vague at best, and cannot in my judgment be the basis of the proposed condemnation. If the General Assembly intended what has been approved, then it was neglectful of its duty.

What has been approved is that a corporation, a subsidiary in fact of a foreign partnership, has filed articles declaring it has the power of eminent domain. There is no claim by the corporation that it is a pipeline company; indeed, in all candor the corporation declares its purpose is to simply condemn rights of way over Arkansas land and then transfer the property to the foreign interests, that will undoubtedly construct a pipeline. What...