Opinion ID: 1356988
Heading Depth: 3
Heading Rank: 3

Heading: Third party interests; the effect of receivership.

Text: Defendant advances several technical arguments based upon the presence of secured interests in the subject property and the placing of a portion thereof in receivership. (3) It is urged (1) that no rights of a prescriptive character could accrue to the public in the presence of deeds of trust affecting the subject property; (2) that even if such rights could accrue in these circumstances, they were here cut off prior to perfection by the occurrence of foreclosure sales; and (3) that the placing of a portion of the subject property in receivership during the prescriptive period cut off all inchoate public rights or at least had a fatal tolling effect with respect to their perfection. We think it important before addressing each of these contentions separately to draw attention to a fundamental misconception which runs through all of them. We deal here not with a form of prescription or adverse possession but with a unique form of dedication. Here the element of adversity is looked to not as a factor necessary to the perfection of a superior property right in the possessor or possessors as such (i.e., in themselves) but rather as an ingredient in the evidentiary structure necessary to the implication in law that a dedication to the public as a whole has occurred. (See 3 Miller & Starr, Current Law of Cal. Real Estate (rev. ed. 1977) § 20:13, p. 475.) When that structure is made to appear the public is not deemed to have wrested its right from the owner but rather is held in law to have been granted it by him. Thus, the true questions facing us are (1) whether such a dedication may be made through legal implication in the face of deeds of trust affecting the subject property; (2) whether foreclosure and sale under such deeds of trust prior to the time when dedication would otherwise be implied operates to prevent such dedication on the part of the new record owner; and (3) whether the placing of the property in receivership operates to remove the period of such receivership from consideration with respect to the implication of dedication on the part of present or future record owners. While we are aware of no case which discusses the effect of the presence of deeds of trust affecting the subject property on its implied in law dedication to public use, there are two cases which bear indirectly on the problem. In People v. Myring, supra, 144 Cal. 351, this court held that long-continued public uses of a roadway and bridge situated on land held by defendant pursuant to a federal patent had resulted in their implied in law dedication to public use. When it was objected that such a dedication could not be so implied because the property was held under a declaration of homestead giving rights therein to defendant's wife, we responded as follows: If the prosecution had sought to show a dedication by deed from him alone, this objection might have been good ..., but the dedication which is presumed from the adverse user by the public operated as an estoppel against the wife as well as the husband, and was independent of any question of homestead. ( Id., at p. 355.) A parallel result was reached in the case of Gray v. Magee (1933) 133 Cal. App. 653 [24 P.2d 948]. There a certain roadway long dedicated to public use had been rerouted shortly before the death of the owner of the property over which it passed. The question was whether the relocated portions of the roadway were subject to implied in law dedication through continued public user of them during the pendency of the owner's estate, it being urged in essence that the executors of the estate had no power to make any kind of dedication contrary to the interests of the beneficiaries. We disagreed with this contention. Without doubt, the court said, an executor may not make an express dedication as to estate lands, but an easement may arise as to estate lands through implied dedication or prescription. ( Id., at p. 662.) [12] What these cases would seem to indicate is that a dedication implied in law as a result of adverse public user arises independently of third party interests in the property. This is so, we believe, because of the character of the public user which underlies any such dedication. Such user must be substantial; it must be carried on by diverse members of the public; and it must be adverse in the sense that we have explained. Such user must be held to impart notice of its occurrence to the whole world, including the holders of other interests in the property. It is objected that the holder of a deed of trust on property subject to public user of the nature here in question, even if he is deemed to be on notice of it, is wholly without power to discourage or prevent it. This, however, does not appear to be so. Under the provisions of section 2929 of the Civil Code, one whose interest in property is subject to a deed of trust is precluded from doing any act which will substantially impair the security of the beneficiary of the deed of trust. (See Cornelison v. Kornbluth (1975) 15 Cal.3d 590, 599 [125 Cal. Rptr. 557, 542 P.2d 981].) Such acts, we believe, must be held to include that of permitting public user of the character here in question, and we see no reason why such a beneficiary may not maintain an action to prevent its continuance. (See Code Civ. Proc., § 526, subd. 2; Lavenson v. Standard Soap Co. (1889) 80 Cal. 245 [22 P. 184]; Perrine v. Marsden (1867) 34 Cal. 14; Buckout v. Swift (1865) 27 Cal. 433; Robinson v. Russell (1864) 24 Cal. 467.) The case of Phillips v. Laguna Beach Co. (1922) 190 Cal. 180 [211 P. 225], upon which defendant strongly relies, is of little assistance to her. There the owner of beachfront property had, by resolution of its board of directors, offered to dedicate a portion of it along the shoreline to public use for park purposes. Subsequent public use was apparently not intense and occurred on a less than regular basis, but it was held that such use was sufficient to constitute an acceptance by the public of the offered dedication. We also held, however, that the judgment  which enjoined future sale or encumbrance  could not be sustained as to the beneficiary of a trust deed who had made a loan on the property some 10 years after the offer of dedication was made. Nothing of record had alerted the beneficiary of the prior dedication and, we noted, a view of the premises at the time of the loan had revealed no significant evidence of public use. There is no evidence that the public were occupying the public use at the time of the visit of the [beneficiary], nor that it ever had occupied any part of the premises so as to impart notice to the [ beneficiary ].... (190 Cal. at p. 185; italics added.) Thus it is clear that even had this case involved implied in law dedication (which it did not, being concerned with express dedication), and even if it had addressed the question of the effectiveness of such dedication in the presence of existing deeds of trust (which it did not, any dedication therein having occurred long prior to the inception of the deed of trust), it suggests only that sparse public user of the type therein involved was not such as to impart notice of its occurrence. We deal here with an entirely different situation, involving substantial, diverse, and readily apparent public user over a considerable period of time. We conclude on the basis of the foregoing that public user of the character involved in the instant case must be held to impart knowledge of its occurrence to the world at large, and that when it has continued for the requisite period of time a dedication to the public will be implied in law which binds not only record owners but all persons having interests in the subject property  including the beneficiaries of deeds of trust in existence during the said period. We are further of the view that the occurrence of foreclosure and sale during the course of the dedicatory period should lead to no different result. Although the purchaser at such a sale will normally receive title free and clear of any unrecorded interests or liens (see 1 Miller & Starr, Current Law of Cal. Real Estate (rev. ed. 1975) § 3:121, p. 544), and although no rights of a prescriptive or adverse nature can arise against him prior to sale and the expiration of the period of redemption (see 3 Miller & Starr, Current Law of Cal. Real Estate, supra , § 19:25, pp. 431-432), we believe that the unique form of notice imparted by public user of the character here in question should operate to burden the title received by the purchaser with all accumulated public interests, even if they not be ripened into an implied dedication at the time he receives title. Accordingly, dedication may in some circumstances be implied in law on the part of such a purchaser even when he has not been record owner for the full length of the dedicatory period. (4) The fact that the subject property was in federal receivership during a portion of the period of public user did not in our view operate to cut off accumulated public interests or remove the period of receivership from consideration for purposes of implied dedication to public use. The order appointing receiver, in enjoining all persons from interfering with the Receiver's possession of the assets ... and from attempting in any manner to take possession of said assets without court order, was intended to preserve the estate or prevent loss thereto (11 U.S.C.A. § 11(a)(3)) pending disposition pursuant to the chapter XI proceedings which led to its issuance. (See generally, 2 Cowans, Bankruptcy Law and Practice (2d ed. 1978) § 606, pp. 263-266; 1 Clark, The Law and Practice of Receivers (3d ed. 1959) § 74, pp. 100-101.) It did not purport to enjoin the public from continuing its long-established uses of the property  at least insofar as such uses did not result in loss to the estate during the period of receivership. We therefore see no reason why continued public user occurring during the subject period should be disregarded or omitted from consideration with respect to a dedication implied in law after the termination of the receivership.