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Buckeye Pipe Line Co. v. Keating

February 14, 1956


Author: Swaim

Before DUFFY, Chief Judge, FINNEGAN and SWAIM, Circuit Judges.

SWAIM, Circuit Judge.

This case involves a type of conflict that is often occurring throughout the United States. A pipe line, used for transporting crude oil, has been located and operated pursuant to an easement since 1888. In 1952 urban growth led to the subdivision of the land through which the pipe ran and the construction of houses, streets and all the requirements of a city residential area. Four of the streets of the subdivision cross the pipe line, and the foundation of the pavement of at least one of these would extend about two inches below the top of the pipe. The plaintiff claims that unless the pipe is lowered and incased it will be damaged by the impact of traffic over these streets and by increased corrosion caused by the paving materials. Each party wants the other to pay for lowering and incasing the pipe which the trial court found would cost $2,900.00.

In communities such as the one here involved conflicts due to changing land use often occur, and ordinarily the parties recognize the rights of all concerned and an agreement is reached. But in this case the owner of the pipe line, on the one hand, and the owners of the land and the city and its officials, on the other, refuse to make any concessions or come to any agreement. In the meantime, the pipe line is in danger of being damaged and the residents of the subdivision and others are forced to walk and drive through the mud because the streets have not been paved for twenty feet on each side of the pipe.

The easement, which the plaintiff claims is being interfered with, was granted in 1888:

"In Consideration of One Dollar, the receipt of which is hereby acknowledged, We J. H. Clough and C. G. Wicker of Chicago, Ill., individually and jointly have granted to The National Transit Company, its successors and assigns, the right to lay a pipe line across the following described land situated in Lake County, State of Indiana, viz:

"* * * It is understood and agreed that this right of way does not convey any fee interest in the land above described, together with the right to operate, maintain, repair and remove the same at any time. The pipe shall be laid along the route as indicated by the present survey, and be buried to such a depth as not to interfere with the cultivation of the land, or the existing tile drainage. The National Transit Company, its successors and assigns, agree to pay all damage to growing crops occasioned by laying, operating and removing said pipe line * * *."

In the same year an oil pipe line was constructed about one foot below the surface of the land described in the above grant. The present owners of the land and of the pipe line, who are parties in this litigation, are the successors to the parties of the original grant of the easement.

In 1910 the Town of Highland, Indiana, was incorporated south of the land through which the above easement was granted, and in 1952 that land was purchased by defendant Keating and subdivided to provide a residential area for Highland. This litigation arises because Buckeye Pipe Line Company claims that the construction and use of streets over its pipe line will result in damage unless the pipe line is lowered and incased. Both parties claim that their interest in the land is superior and that the other party must pay for lowering and incasing the pipe line. The appellants also argue that the streets in question will not injure the pipe.

The plaintiff's pipe line runs north and south through the subdivision, Highland Terrace, and four of the new east-west streets in the subdivision cross the pipe. Each of these four streets has been graded and paved to within ten feet of each side of the pipe. The parties apparently are determined to leave the subdivision in this condition until the courts have settled their dispute.

Buckeye Pipe Line Company brought this suit against Edward M. Keating, who subdivided the land, Mercantile National Bank of Hammond, Indiana, the trustee of the subdivision, and the Town of Highland and its officials. Plaintiff prayed that its title in the easement be quieted against all the defendants, that the defendants be permanently enjoined from building any structure that would interfere with the pipe or its accessibility for maintenance purposes, and that $15,000.00 damages be awarded. The trial court found no evidence of actual damage to the pipe line, but did find that the four streets, if completed as planned, and the traffic thereon would be likely to injure the pipe at its present depth. The court held that Buckeye's easement was superior to any later acquired interest, and that the defendants would have to adapt their use of the land to the rights of the Pipe Line Company. The court's decree awarded no monetary damages but enjoined the defendants from paving the streets over the pipe line and required them to take whatever steps were necessary to prevent traffic from crossing over the pipe. The decree also provided, however, that the injunction would be dissolved when the pipe was incased and lowered or when the defendants paid $2,900.00 to cover the cost of incasing and lowering.

The appellants' principal argument is that the injunction was improper because there was no evidence that paving and using the streets would injure the pipe, and therefore the court was actually giving the plaintiff a fee simple interest in the land through which the easement ran. Not only was there sufficient evidence to substantiate the trial court's finding, but the record as a whole convinces us that injury to the pipe would be a probable result of paving and using the streets while the pipe is unprotected and at its present level.

Mr. Baque, an engineer for Buckeye, testified that the pipe should be incased in a larger steel pipe and lowered at the four cross streets in order to protect it from the weight, impact and vibration of traffic passing over it. He testified that the American Petroleum Institute recommended this type of incasing where oil pipes go under highways and railroads. On redirect examination Mr. Baque pointed out that the pipe was of "thread and collar construction" and that, unless protected in some manner, weight and vibration of traffic over it would cause leakage around the collars.

One of plaintiff's witnesses was Merle Nicewander, the town engineer of Highland and a graduate of the University of Illinois in Civil Engineering. During plaintiff's examination of Mr. ...

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