219 F. 614 | D. Kan. | 1913
On July 10, 1913, the public utilities commission of Kansas made an order that the receivers heretofore appointed by this court of the property of the Kansas Natural Gas Company be directed to' make certain extensions of the pipe lines of said company, which extensions were specified in the order, and to begin contracting for and the purchase of material to carry into effect the order on or before the 17th day of July, 1913. The work ordered to be done was estimated by the commission to cost from $285,000 to $300,000. The receivers have applied to the judge of this court for direction as to their duties with respect to this order. The validity of the order is a fundamental consideration. The Kansas Natural Gas Company is insolvent. Its property is in the hands of receivers in a suit to foreclose a first mortgage to secure bondholders. The receivers were, however, originally appointed in an administration suit. The order of the commission directs a large expenditure of money now in the hands of the receivers, the making of certain specific contracts, and the building of new pipe lines.
It is well settled that a railroad company chartered to build a particular line under a permissive charter is not liable to the state for a failure to build it, and that only so far as it does build is its property affected by the public interest. York, etc., Ry. v. Regina, 1 El. & Bl. 858, 864; Edinburgh, etc., Ry. Co. v. Philip, 2 Macqu. App. Cas. 526; State v. Southern Minn. R. R. Co., 18 Minn. 40 (Gil. 21); Weymouth v. Penobscot Log Driving Co., 71 Me. 29. And a fortiori, that such a company cannot be required to construct a new or branch line. I know of no reason why this well-settled principle is not applicable in this case.
1. The only proposed extension deemed reasonably practicable is the first alternative extension specified in the order, viz., the extension to the Cushing field. The cost of the entire extension is prohibitory. But it is said that the proposed 'vendors of the gas are willing to build a large part of the pipe line at an estimated cost to them of $500,000, so that the cost to the trust estate will be brought within the limit of the estimate of the commission. As a condition of this expenditure by the vendors and of the procuring of the gas, a valid contract is demanded obligating the receivers for a period of several years to purchase this gas and to pay therefor a relatively high price. To build that part of the line economically which is required of the receivers would necessitate removing from the state of Kansas of a pipe line of equal length now rendered uséless and the relaying of it in Oklahoma. I have heretofore held that all of the property of the Kansas Natural Gas Company within the state of Kansas must be delivered to receivers heretofore appointed by the state court of Montgomery county, Kan. This order has been appealed from, and its effect superseded. When the appeal is decided, and if the order be affirmed, it must be complied with, and precludes the removal of the pipe line and the entering into any long term contract, such as the one demanded in this case.
From these considerations, I have reached the opinion that I am not justified in ordering these extensions under present conditions, and the receivers are directed not to comply with the order of the commission with respect thereto.