The question presented in this case is whether a city which vacates dedicated streets and alleys in which private utilities have previously been granted the right to maintain their facilities and requires the removal thereof and reinstallation in other streets and alleys, has exercised its reasonable right of regulation under its police power or has taken private property without compensation.
The trial court in a considered and fully documented opinion held:
"This court holds that the action of the city in directing the removal of the respondents' utility installations without compensation, under the circumstances in this case, exceeds the city's authority to exercise its police power and is a violation of the constitutional guarantees of the respondents. It is beyond the scope of regulation. It is an actual taking of private property for which just compensation must be paid. The decision on these issues being controlling, it is unnecessary to discuss the others raised by the parties."
The city appealed. Exhaustive briefs were filed and forceful argument advanced on behalf of the parties. An amicus curiae brief on behalf of the Michigan Association of Municipal Attorneys is acknowledged.
The facilities in question have in fact been removed and reinstalled, but under an express reservation *Page 548 of the right of the utilities to be compensated for the stipulated nonbetterment cost of removal and reinstallation. The facts as well as statements of position have been stipulated. The trial court succinctly set forth the factual background and we quote from his opinion:
"The issues in this case are framed from an agreed stipulation of facts. They are as follows:
"Undertaking to redevelop an area within its corporate boundaries designated as `West Side Industrial Project, UR Mich 1-4,' the city of Detroit hereinafter referred to as the city, on July 9, 1957, through its common council and pursuant to the provisions of PA 1945, No 344, as amended (CL 1948 and CLS 1961, § 125.71, et seq. [Stat Ann 1958 Rev and Stat Ann 1963 Cum Supp § 5.3501 et seq.]), which authorizes the rehabilitation of blighted areas and prescribes the method of accomplishment, adopted and approved a redevelopment plan and directed the institution of the necessary condemnation proceedings. The estimated not costs of the project after deduction of the estimated proceeds from the private sale of some of the land was $5,221,000. On November 14, 1957 the city entered into a loan and grant contract with the United States government pursuant to title 1 of the Federal housing act of 19491 whereby the government would assist in financing the project by contributing 2/3 of the net cost to the city's 1/3. It is pertinent to note the Federal regulations, Urban Renewal Manual, book 1, section 11-1-2 provides `Removal or relocation of utility lines owned by a private utility company will not be allowed as a project expenditure unless compensation to the company is required under applicable State and local law. If the LPA (local public agency — in this case the city) is required to compensate the utility company for proposed changes, the necessity for making the changes and the basis used in *Page 549 computing the estimated amount of such compensation shall be described. A legal opinion as to the obligations of the LPA to provide the compensation indicated shall be provided with part 1 of the application for loan and grant.' The removal or relocation costs of the utility lines of private utilities was not included in the application although such costs for municipally-owned utilities (public lighting and water) were included. The development plan of rehabilitation called for, among other things, the vacation of certain plats, streets and alleys, and the rerouting of certain utilities to other streets and alleys. The respondents, Michigan Bell Telephone Company, hereinafter referred to as Bell, and the Detroit Edison Company, hereinafter referred to as Edison, maintained installations in certain of the streets and alleys which were to be vacated. The city successfully completed its condemnation proceedings to which neither Bell nor Edison were named as parties. On February 20, 1959, the instant vacation proceedings were instituted in accordance with the provisions of the plat act PA 1929, No 172, as amended (CL 1948, §§ 560.1-560.79 [Stat Ann 1953 Rev and Stat Ann 1957 Cum Supp §§ 26.431-26.509]), which provides for the altering and vacating of plats and among other things, the reservation of easements for utilities in vacated streets and alleys. Both Bell and Edison appeared and objected insofar as the proposed vacations affected streets and alleys in which their installations were located, unless easements were reserved for them in these same streets and alleys or unless the city agreed to bear the cost of the removal and relocation of their installations to the new areas to be designated in the redevelopment plan. It should be noted that although the installations of each utility were differently located, the legal principles involved are the same. A controversy developed and on June 18, 1959, pursuant to an understanding between the parties which recognized and preserved the right to further judicial determination, an order of vacation *Page 550 was entered by the Honorable Robert M. Toms, this court's predecessor, which contained the following provisions: `Provided, however, that there is hereby reserved in the streets and alleys above described, for the use of public utilities, easements for the maintenance of the utility poles, wires and equipment as presently located; provided always that this paragraph of this order is interlocutory and is subject to further final order, to be entered after proofs and arguments.' Following the entry of this order the facilities of both Bell and Edison were removed by agreement. Bell has maintained installations in this area since 1907 pursuant to PA 1883, No 129, as amended (CL 1948, §§484.1-484.10, as amended [Stat Ann and Stat Ann 1957 Cum Supp §§ 22.1411-22.1419]), which provides further that its installations serve not only this area but the areas beyond. Similarly Edison has maintained facilities serving this area and areas beyond as authorized and required by the properly and legally adopted ordinances of the city of Detroit. The development plan for rehabilitation involves some 73 acres of land containing some 424 structures, which land has to be acquired and the structures demolished. It provides for street widening and paving, installation of walks, sewers and water mains, creation of a public park, rezoning, vacation of certain plats, streets and alleys, rerouting of utilities and the sale of large portions of the land to private persons and corporations for light industrial and commercial uses. It is agreed that the nonprofit, nonbetterment costs of removal and relocation amounts to $11,305 in the case of Bell and $1,746.36 in the case of Edison. The city contends that the utilities pay these costs. The utilities contend that the city should pay."2 *Page 551
While the 2 utilities acquired their rights to use the streets and alleys of appellant-city by different means, it is stipulated their rights for the purpose of this case are identical.
In arriving at his conclusion the trial judge postulated 4 propositions. First that the city was here engaged in a governmental as distinguished from a proprietary function. While we do not consider the proposition essential to decision, we agree. The statute3 under which the city condemned the property involved declares the purpose to be accomplished "a public purpose and a public use." For us to hold otherwise we would have to declare the statute unconstitutional. Urban renewal has been declared a function of government by the legislature and the power to accomplish it has been properly delegated to the city. We find no merit in the distinction here urged by appellees. Incident to this claim it is also contended by appellees that because part of the land condemned by the city and otherwise acquired by it is to be subdivided and resold, the project loses its governmental character. The claim is not tenable. This precise point is controlled by our prior holding inIn re Slum Clearance, 331 Mich. 714, at p 721:
"To remove health, crime and fire hazards by slum clearance, is clearly a proper and reasonable exercise of the police power. * * * The fact that under the subsequent rehabilitation or restoration, the cleared area * * * passes into private hands to private property is an incident which does not change the nature of the slum clearance."
This rule in our jurisprudence is amply supported by other holdings, State and Federal. *Page 552
The second proposition held by the trial court as controlling is that upon acquisition and exercise by a utility a franchise becomes a vested property right, in the nature of a contractual right protected by Federal and State constitutional guarantee. So it does. The proposition is well settled. City of Niles v.Michigan Gas Electric Co., 273 Mich. 255, 262. This rule, however, in this State and nationally, is subject to variations and modifications, general and specific, which render the broad statement as such incomplete. The rights acquired are dependent upon the nature of the original grant and any reservations therein. Even when acquired and exercised these rights are subordinate to the rights of the municipality in the reasonable exercise of the police power as delegated to it by the sovereignty — the State. Assuming the city here had contracted away this superior supervisory control, the action would have been a nullity. Municipalities cannot contract away their governmental obligations. The right of control over the utilities in the exercise of their franchises, contracts, or vested rights, whatever name given them, abides in the city. This rule becomes the more important as we continue to examine the development of the trial court's rationale.
Proposition 3 of the able trial judge's 4-point basis for his conclusion is that there are limitations upon the city's exercise of the police power over private property — and specifically private property in the nature of the franchise rights hereinbefore mentioned. No party to the proceedings contests this principle, and there is no point in discussing it. Like many general rules, however, this too is subject to the requirement that the exercise of the police power be "reasonable." Here we enter the area of specifics which in every case calls for a judicial determination of the meaning of "reasonable" under *Page 553 the particular facts of a given case. Such determination in this case need not be made because at this point proposition 3 and the last of the trial court's premises merge and present a combined question. The judge rhetorically asks in point 4:
"Is what the city proposes here a valid exercise of regulatory police power or is it an unconstitutional taking of property?"
This is the core of the matter and we think the question encompasses the whole issue. All that is needed is a more precise delineation of the meaning of the phrase "what the city proposeshere." We construe the phrase to mean the act of vacating the streets and alleys. There can be no doubt that as to the combined question the answer must be in the affirmative. The city is empowered by statute to do just exactly what it did. Its right so to do is prescribed in PA 1929, No 172, § 62 (CL 1948, § 560.62), as amended by PA 1958, No 101 (CLS 1961, § 560.62 [Stat Ann 1963 Cum Supp § 26.492]), which provides:
"If the petition [to vacate] * * * involves the vacation of any alley, street, or other public place then being used by any public utility for public utility purposes, it is hereby deemednecessary for the health, welfare, comfort and safety of thepublic to reserve an easement therein for the use of publicutilities * * * including a situation where a public utility is not then making an actual use of the area to be vacated." (Emphasis supplied.)
Here we believe is where the issues became confused. Appellees' rights did not become involved in the exercise of the delegated police power through the power of eminent domain granted to the city by the legislature for use in acquiring real property, or any rights in property under the urban renewal act. Strictly speaking, that statute with its delegation *Page 554 of power to the municipality in the nature of the right to condemn private property for a legislatively declared public purpose, is not here involved. As the stipulation sets forth:
"The purpose of this proceeding is to adjudicate and determine whether the city of Detroit is entitled to havestreets and alleys vacated in this proceeding without reservationof easements for existing public utilities' facilities or paymentof relocation costs." (Emphasis supplied.)
Quite patently the alleys and streets wherein the equipment of appellees was located did not have to be condemned for the city to acquire control over them. These streets and alleys which ran through the whole blighted area to be rehabilitated, the city already owned.
The relative rights of the utilities and the city are to be found in the statute hereinbefore set forth which authorized the vacation of plats through which dedicated streets and alleys ran.
It would seem, short of disregarding completely the foregoing statute, the position of appellant-city cannot be sustained and the trial court reversed. We are asked to adjudicate and determine whether the city is entitled to have streets and alleys vacated in this proceeding without reservation of easements for existing public utilities. We are constrained to answer "no," because the applicable statute says "no." The parties having stipulated that if this be our finding — the facilities having already been removed and the easements not reserved — the damage should be in the amounts agreed upon by the parties. The trial court ordered the payment thereof. His order must be affirmed.
By our decision here we would not be understood to dilute in any degree, nor modify by any implication herefrom the obligation of a public utility to *Page 555 remove, relocate and reinstall its facilities, at its own expense, within streets where easements have been acquired, when a public purpose requires. We leave unaffected by our decision here the principle enunciated in New Orleans Gas Light Co. v.Drainage Commission of New Orleans, 197 U.S. 453 (25 S Ct 471,49 L ed 831), and the cited cases following its rule. The principle there enunciated of the retained police power of the municipality is not here involved. Our holding is based upon the statute hereinbefore quoted which expresses a clear legislative intent to distinguish between that class of case dealing with removal, relocation, and reinstallation of utility facilities in a specific street, or under certain circumstances from one street to another where vacation of a street or an alley in which autility easement has been acquired is involved and one in whichthe street is not vacated.
It seems to us that the question we are urged by both parties to answer judicially, namely, whether the vacation of a dedicated street or alley with the attendant requirement of the removal of utility facilities without reservation of an easement therefor constitutes an unlawful taking of private property, or an exercise of regulatory control has been legislatively answered by the statutory mandate that the easement be reserved. Unreserved, the extinguishment thereof without compensation would constitute an unauthorized taking of private property. This question was saved for review because, as noted by the trial judge, when the vacation proceedings were instituted by the city, "both Bell and Edison appeared and objected insofar as the proposed vacations affected streets and alleys in which their installations were located, unless easements were reserved for them in these same streets." The controlling legislative enactment is consistent with the general principle underlying this whole controversy. *Page 556 The rule was clearly stated in In re Brewster Street HousingSite, 291 Mich. 313, 342:
"Where property is taken for public health and safety, it cannot be taken without compensation, and there is no distinction between the power of eminent domain and the police power in this regard. Russell, Police Power of the State, p 86. In this case, the legislation involved is upheld under the police power of the State. But, if private property is to be taken for the purpose of carrying out the project in question, such property may be acquired against the will of its owner only by the exercise of the power of eminent domain. The power of eminent domain may be lawfully resorted to when authorized by the legislature to take the property of private individuals for purposes justifiable only under the police power of the State."
The inclusion of the traditional words accompanying an exercise of the police power in the statute requiring the reservation of utility easement, viz., "it is hereby deemed necessary for thehealth, welfare, comfort and safety of the public to reserve aneasement therein for the use of public utilities" leave no doubt as to the public policy of the State.
For the reasons herein set forth the order of the trial court should be affirmed. No costs, a public question being involved.
DETHMERS, J., concurred with O'HARA, J.
BLACK, J., concurred in result.