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Opinion No. 5389

June 13, 1978


'Voluntary' conveyance to a utility company with power of eminent domain.

A 'voluntary' conveyance of land to a utility company with power of eminent domain is not an act of 'dividing or partitioning' as that phrase is used in the Subdivision Control Act.

Honorable Ernest W. Nash

State Representative

The Capitol

Lansing, Michigan

You have requested my opinion regarding the application of the Subdivision Control Act of 1967, 1967 PA 288; MCLA 560.101 et seq; MSA 26.430(101) et seq, to the following circumstances:

1. X purchased a farm in 1972 having an area of 160 acres more or less;

2. In the ensuing 5 years, X has divided the farm, and conveyed to others 4 parcels having areas of approximately 1 acre, 5 acres, 5 acres, and 5 acres;

3. Consumers Power Company, for purposes of erecting towers and lines for power transmission purposes, wishes to acquire from X, at an agreed price, fee simple title to a fifth parcel, this parcel to be three acres or less in area.

You ask whether X would be in violation of the 'Subdivision Control Act', supra, if he conveys to Consumers Power fee simple title to the 3-acre parcel without filing a plat in accordance with the procedures provided therein.

The Subdivision Control Act, supra, Sec. 102(d) states:

"Subdivide' or 'subdivision'; means the partitioning or dividing of a parcel or tract of land by the proprietor thereof or by his heirs, executors, administrators, legal representatives, successors or assigns for the purpose of sale, or lease of more than one year, or of building development, where the act of division creates 5 or more parcels of land each of which is 10 acres or less in area; or 5 or more parcels of land each of which is 10 acres or less in area are created by successive divisions within a period of 10 years.'

1967 PA 228, supra, Sec. 103(1) provides:

'Any division of land which results in a subdivision as defined in section 102 shall be surveyed and a plat thereof submitted, approved and recorded as required by the provisions of this act.'

1967 PA 288, supra, Sec. 264 imposes criminal penalties for selling any lot, piece, or parcel of land without first having recorded a plat thereof when required by the provisions of the act.

Should a power utility acquire an easement over the three-acre parcel, no division or partition would be effected. To rule then, that the conveyance of a fee interest to a utility for power transmission purposes would contravene the statute, is not tenable. This conclusion is underscored by the fact that only voluntary conveyances are encompassed within the statutory definition of the word 'subdivide'. Transfers made as the result of a judgment entered in a condemnation proceeding are not subject to the act.

Public utility companies organized under 1923 PA 238, MCLA 486.251 et seq; MSA 22.1671 et seq are possessed of the power of eminent domain. 1923 PA 238, supra, provides:

'Every corporation organized as provided in section 1 of this act shall have the following powers:

Fifth, to condemn all lands and any and all interests therein, easements, rights of way, and other property other than lands lying within a known mineral zone of iron ore, copper, or coal, which may be necessary to generate, transmit, and transform electric energy for public use in, upon, or across private property.'

Where an owner of private property which is sought by an entity with power of eminent domain is prepared to convey the desired parcel for an agreed consideration, to insist upon condemnation would not only be illogical, but also judicially uneconomical.

A majority of courts look upon the conveyance of real property to an agency vested with the power of eminent domain as a 'forced sale', and thus such sales are not admissible as evidence of value in a condemnation proceeding involving similar property. See State v Frost, 456 SW2d 245, 257 (Tex Civ App 1970); State of Washington v Lacey, et al, 8 Wash App 542, 507 P2d 1206 (1973); U.S. v 55.22 Acres of Land, 411 F2d 432 (CA 9, 1969); Wheeling Electric Co v Gist, 154 WV 69, 173 SE2d 336 (1970); 85 ALR2d 163, 164. Such sales are made if not directly then implicitly under the threat of condemnation, State v Frost, supra.

In 1893 PA 206, Sec. 27, MCLA 211.27; MSA 7.27, the lack of probative value of forced sales is likewise recognized for purposes of assessment of property for levy of ad valorem taxes on real and personal property. Section 27, defining cash value for assessment purposes provides:

"Cash value' means the usual selling price at the place where the property to which the term is applied shall be at the time of assessment, being the price which could be obtained for the property at private sale and not at forced or auction sale. . . .'

I am therefore of the opinion that a 'voluntary' conveyance of lands to a power utility, organized under 1923 PA 238, supra, and possessed of the power of eminent domain, is not act of 'dividing or partitioning' as that phrase is used in 1967 PA 288, supra, Sec. 102(d), where the parcel conveyed is acquired for purposes of generating, transmitting or transformation of electric energy.

Frank J. Kelley

Attorney General