Court Opinion

ID: 9576310
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:23:07.10617+00
Date Added: 2024-06-11T13:05:27.741349
License: Public Domain

SPENCE, J.
I dissent.
In my opinion, the revenue in question from oil and gas production on tidelands, which lands had been previously granted by the state to the city of Long Beach, have been validly released by the Legislature from the trust, and the city may properly use the revenue so released for municipal improvements.
The precise question before us appears to be one of first impression, but I do not believe that the conclusions reached in the majority opinion can be reconciled with the decisions of this court in Atwood v. Hammond, 4 Cal.2d 31 [48 P.2d 20], and City of Long Beach v. Marshall, 11 Cal.2d 609 [82 P.2d 362], nor with the implications of the more recent decision of this court in City of Long Beach v. Morse, 31 Cal.2d 254 [188 P.2d 17]. These and other authorities will be hereinafter discussed, but as the solution of the present problem involves a determination of the respective rights of the state and the city to the revenues which have been admittedly released from the trust, the fundamental question to be considered is that of the nature of the trust under which the tidelands are held. It appears to me that this question has been erroneously oversimplified in the majority opinion, which treats the state as the “trustor” or “settlor,” and the Act of 1951 (Stats. 1951, p. 2443) as a “revocation,” or at least a “partial revocation” of the trust, resulting in a “reversion” to the state of said revenues. This reasoning is based upon an assumed analogy in all respects between the trust upon which the tidelands are held and the ordinary private trust, but I can find no proper basis for such analogy. On the contrary, the trust involved here appears to be sui generis, and any attempt to determine the respective rights of the state and city upon such reasoning can lead only to confusion and to erroneous conclusions.
When the state embarked upon the program of granting the tidelands to local authorities, it was dealing only with those portions of land along the shore line which were submerged at high tide and exposed at low tide. It is a matter of common knowledge that there are little, if any, tidelands *214at many points where the shore line is precipitous, and that the greatest areas of tidelands are found in and about our bays and at the mouths of our rivers, near which points many of our municipalities have developed. In their natural state, these tidelands were apparently of little value for any purpose, and were obviously of little value for navigation or commerce because of the relatively shallow water which covered them even when the tides were at their highest. Furthermore, the extent of the so-called tidelands has been subject to change over the years by reason of natural accretions to, or the wearing away of, the shore line, or by reason of artificial improvements by way of dredging and filling. In fact, the improvement of any tidelands for the purpose of navigation and commerce normally contemplates the artificial change of a part or all of such land into high land bordering upon water deep enough for the normal purposes of navigation and commerce. Hence, the state, in granting the tidelands to the local authorities, was dealing with lands having apparently little value and having irregular boundaries which could not be precisely and permanently delineated. The Legislature no doubt concluded that some of such lands should be improved and could best be improved in the interest of navigation and commerce by the local authorities which administered the lands bordering such tidelands. It therefore embarked upon its program, and the grants to the local authorities were accompanied with the express or implied undertaking that such lands would be so improved by the local authorities without expense to the state. Such was the express stipulation in the grant of the tidelands under consideration to the city of Long Beach. (City of Long Beach v. Morse, supra, 31 Cal.2d 254, 257.) Pursuant to such undertaking, those lands have been extensively improved over the years by the city of Long Beach by the expenditure of tremendous sums of money.
In the light of these observations, let us consider the nature of the “trust” with which we are dealing. It has been said that these tidelands were acquired by the State of California by the act of admission, subject however to a trust for navigation, commerce and fishing. (City of Long Beach v. Marshall, supra, 11 Cal.2d 609, 614.) The precise nature of this trust has never been clearly defined, and, as above indicated, the trust appears to be sui generis. (See cases discussed in Illinois Central R. Co. v. Illinois, 146 U.S. 387 [113 S.Ct. 110, 36 L.Ed. 1018], and Boone v. Kingsbury, 206 *215Cal. 148 [273 P. 797].) Some things nevertheless appear certain. First, that the State of California was itself a trustee rather than a trustor in relation to any trust imposed upon such tidelands, and that the beneficiaries of such trust were not alone the people of this state but all the people of the United States. Thus, it has been indicated that the federal government could enforce such trust. (Boone v. Kingsbury, supra, 206 Cal. 148, 189.) Second, that the trust does not permanently attach to all the lands which were originally tidelands, for many of the areas embraced in the original tideland areas have been improved by developing such lands into high lands, and portions thereof have become either the property of municipalities (Atwood v. Hammond, supra, 4 Cal.2d 31, 38) or of private owners (Boone v. Kingsbury, supra, 206 Cal. 148, 189), free of any trust when no longer necessary for the accomplishment of the trust purposes.
In determining the nature and extent of the trust imposed upon the tidelands, such lands should be distinguished from the lands involved in United States v. California, 332 U.S. 19 [67 S.Ct. 1658, 91 L.Ed. 1889], which, under the complaint in that action, included only lands “lying seaward of the ordinary low water mark on the coast of California.” (P. 22.) We are here concerned only with lands lying shoreward of such low water mark. While the trusts affecting both types of land may have a common origin, no question was raised in the cited case concerning the respective rights of the state and the federal government in “tidelands down to the low water mark.” (P. 30.) Rather, the court merely refused to extend the law relating to the latter, as expounded in Pollard's Lessee v. Hagan, 3 How. (U.S.) 212 [11 L.Ed. 565], to cover the land there in controversy to the seaward of the low water mark.
The historical background of the trust in tidelands throws some light upon the peculiar nature of such trust. The original colonies acquired these tidelands by right of conquest, and after the conquest, such lands were held by them “as they were by the king, in trust for the public uses of navigation and fishery, and the erection thereon of wharves, piers, light-houses, beacons and other facilities of navigation and commerce. Being subject to this trust, they were publici juris; in other words, they were held for the use of the people at large. ... It is also true that portions of the submerged shoals and flats, which really interfered with navigation, and could better subserve the purposes of commerce by being *216filled up and reclaimed, were disposed of to individuals for that purpose. But neither did these dispositions of useless parts affect the character of the title to the remainder.” (Illinois Central R. Co. v. Illinois, supra, 146 U.S. 387, 457, quoting from Stockton v. Baltimore & N. Y. R. Co., 32 F. 9, 19, 20.)
With respect to the tidelands of California, it was said that “upon the admission of California into the Union upon equal footing with the original States, absolute property in, and dominion and sovereignty over, all soils under the tide waters within her limits passed to the State, with the consequent right to dispose of the title to any part of said soils in such manner as she might deem proper, subject only to the paramount right of navigation over the waters, as far as such navigation might be required by the necessities of commerce with foreign nations or among the several States, the regulation of which wTas vested in the general government.” (Illinois Central R. Co. v. Illinois, supra, 146 U.S. 387, 465, quoting approvingly from Weber v. State Harbor Comrs., 18 Wall. (U.S.) 57, 65 [21 L.Ed. 798].)
In Boone v. Kingsbury, supra, 206 Cal. 148, at page 180, in referring to “the title in the soil of the sea or arms of the sea,” it is said that such title “at common law was vested in the sovereign in trust for the people”; and in referring to the title of the states and to the exhaustive study therein made of the entire subject, it quotes approvingly on page 180 from Shively v. Bowlby, 152 U.S. 1 [14 S.Ct. 548, 38 L.Ed. 331], as follows: “The foregoing summary of the laws of the original states shows that there is no universal and uniform law upon the subject; but that each state has dealt with the lands under the tide waters within its borders according to its own views of justice and policy. ...”
In summary, it appears from these authorities that historically the title to the tidelands has been held by the sovereign subject to a trust which is defined in general terms as a trust for navigation, commerce and fishing; that the exact nature of the trust has never been clearly defined; that the main purpose of the trust is to maintain a shore line which is generally free from any substantial interference with the public enjoyment of navigation, commerce and fishing; that the sovereign may deal with the tidelands in almost any way so long as there is no substantial impairment of the trust purpose; and that any substantial impairment of the trust purpose in the tidelands within any state could be abated by the state or the federal government.
*217Concerning the California tidelands, we find that title to all of such lands, with the possible exception of title to those lands covered by prior Mexican grants, was acquired by the state by the act of admission following their acquisition by the United States under the Treaty of Guadalupe Hidalgo. In dealing with those lands in the early case of Oakland v. Oakland Water Front Co., 118 Cal. 160, at page 183 [50 P. 277], the court said: “. . . the several states hold and own the lands covered by navigable waters within their respective boundaries in their sovereign capacity, and primarily for the purpose of preserving and improving the public rights of navigation and fishery. They have in them a double right, a jus publicum and a jus privatum. The former pertains to their political power—their sovereign dominion, and cannot be irrevocably alienated or materially impaired. The latter is proprietary and the subject of private ownership, but it is alienable only in strict subordination to the former.”
The same distinction between the state’s sovereign and proprietary rights in tidelands was made in Santa Cruz v. Southern Pac. Co., 163 Cal. 538, 544 [126 P. 362], and in People v. California Fish Co., 166 Cal. 576, 597 [138 P. 79]. In its sovereign capacity, the state held these lands subject to a public trust for navigation, commerce and fishing; and it could not completely divest itself of its responsibilities as such trustee to the impairment of the public interest. (Boone v. Kingbury, supra, 206 Cal. 148, 183, 189; City of Long Beach v. Marshall, supra, 11 Cal.2d 609, 614.) However, in its proprietary capacity and as the proprietary owner, the state could grant the tidelands to a municipality subject to this public trust. (Atwood v. Hammond, supra, 4 Cal.2d 31, 37; City of Long Beach v. Marshall, supra, 11 Cal.2d 609, 614-615.) This distinction between the state’s sovereign and proprietary rights and duties in respect to the tidelands was not considered material for the purpose of the decision in City of Long Beach v. Marshall, supra (see pp. 614-615), but as will hereinafter appear, such distinction is important in the determination of the question presented here.
Various legislative acts, other than the Act of 1951 (Stats. 1951, p. 2443), affecting the Long Beach tidelands have been discussed in numerous cases. (City of Long Beach v. Lisenby, 175 Cal. 575 [166 P. 333]; City of Long Beach v. Marshall, supra, 11 Cal.2d 609; Miller v. Stockburger, 12 Cal.2d 440 [85 P.2d 132]; City of Long Beach v. Morse, supra, 31 Cal. *2182d 254.) Such discussion will not be repeated here except insofar as it affects the particular problem before us.
In City of Long Beach v. Marshall, supra, 11 Cal.2d 609, at page 616, it was said: “It remains only to point out briefly that the history of tideland grants in this state, and the actions of the various legislatures and the courts in connection therewith, show a general agreement that the tidelands were conveyed to municipalities in fee, subject only to the public trusts and the limitations and reservations specified in the acts; and that until the discovery of these valuable oil rights in the Southern California tidelands no serious doubt was ever expressed as to the title of the municipalities.”
The Marshall case was brought on the theory that “the rights in oil and other minerals belonged to the state and not to the city” (p. 612), and such theory was held untenable. (See also Miller v. Stockburger, supra, 12 Cal.2d 440.) The court there said at page 613, in speaking of this original grant to the city of Long Beach in 1911 (Stats. 1911, p. 1304) : “Giving this language its ordinary and reasonable meaning, it would seem clear that the state intended to and did convey whatever title or interest it had in these lands to the city, in fee simple, subject to certain conditions and upon certain trusts.” It follows from the two cited cases that ever since the original grant in 1911, the rights in the oil and other minerals under the Long Beach tidelands and the proceeds from the extraction thereof have belonged to the city, rather than to the state, subject only to the trust under which the city held such tidelands.
In City of Long Beach v. Morse, supra, 31 Cal.2d 254, the question of the right of the city to divert a portion of the proceeds of the production of oil and gas to the city’s general “Public Improvement Fund” was before this court. That case arose prior to the Act of 1951 (Stats. 1951, p. 2443) and before there had been any express declaration by the Legislature that such proceeds were no longer necessary for the trust purpose. This court there said at pages 257 and 258: “If the proceeds from the sale of oil and gas are regarded as corpus (see Best. Trusts, § 238; Bogert, Trusts and Trustees, §§ 789, 828), they must be used for the purposes set forth in the legislative grants in trust, for the city, as trustee, clearly has no authority to appropriate the corpus to its own uses contrary to the terms of the trust. If the proceeds are regarded as income from trust property, the trustee, in the absence of a legislative provision to the con*219trary, has no more right to them than it has to the corpus.’' (Emphasis added.)
Since the decision in City of Long Beach v. Morse, supra, there has been enacted such “legislative provision to the contrary.” In 1951 (Stats. 1951, p. 2443), the Legislature released a portion of such proceeds from the trust, being the precise portion which is in controversy here. By that act the Legislature expressly found and determined that from the revenue derived from oil production from the tidelands, the city has constructed upon these lands various harbor facilities “necessary or convenient for the promotion of commerce and navigation” at a cost of approximately $35,000,000; that from the same source the city has now available and unexpended approximately $75,000,000; that it will continue to receive from the same source for many years to come approximately $24,000,000 per annum; that in addition, the city obtains large quantities of “dry gas” derived from the natural gas produced from said lands, which it sells; that in view of the already large expenditures on these lands for harbor improvements and the available and anticipated sums, the expenditures of more than 50 per cent of the revenue from the oil production for trust purposes would be ‘1 economically impracticable, unwise and unnecessary”; that “50% of all revenue” from the oil produced on these tidelands and “all of the revenue . . . derived from ‘dry gas’ ... is hereby declared to be free from the public trust for navigation, commerce and fisheries, and from such uses, trusts, conditions and restrictions as are imposed by any of said above-entitled acts.” (Stats. 1951, pp. 2444-2445.)
It was clearly within the power of the Legislature to release such portion of the city’s income from the trust upon finding that such portion was no longer required for the purposes of the trust. (Atwood v. Hammond, supra, 4 Cal.2d 31, 35-36, 39, 41-42; Illinois Central R. Co. v. Illinois, supra, 146 U.S. 387, 452-453.) In the Atwood case, the Legislature had made a similar declaration with respect to a portion of the San Diego tidelands, releasing them from the trust. (Stats. 1929, ch. 642, p. 1058.) This court there said at pages 42 and 43: “We are of the view that it was competent for the legislature upon finding that the eighteen-acre tract was ‘not longer required for navigation, commerce or fisheries,’ to free it from the public easement for those purposes.” It was further held that the Legislature could not thereafter deal with such land upon the theory that the state owned *220the land so released from the trust. If then the Legislature may validly release a portion of the tidelands themselves from the trust upon finding that such lands are no longer required for trust purposes, it follows that the Legislature may validly release a portion of the proceeds of such tidelands. Such was the necessary implication of this court in City of Long Beach v. Morse, supra, 31 Cal.2d 254, when it predicated its decision there on the “absence of a legislative provision” expressly finding that such proceeds were no longer required for trust purposes and releasing them from the trust.
The power of the Legislature to make such declaration under appropriate circumstances is derived from its sovereignty and the duty imposed upon it in accepting the tidelands under the act of admission, subject to the public trust. It is true that this court, in discussing the possible distinction between the state’s sovereign and proprietary rights in City of Long Beach v. Marshall, supra, 11 Cal.2d 609, said at page 614: “There is neither logic in, nor practical necessity for the ‘double fee’ doctrine”; and on page 615 said, in speaking of the grant to the city: Such language cannot be distorted to mean that the grant to the city is only of rights of sovereignty in the sense of political or governmental power. The argument of the state’s ‘double fee’ is met by the very statutory language which grants the land, for it conveys ‘all’ the ‘right, title and interest’ of the state. Whatever the state had by way of title or interest, however, divided it may have been, it all passed under the plain words of the grant.” That language should be read in the light of the problem then before the court, and it should not be interpreted so broadly as to declare that the state, acting in its sovereign capacity, did not retain the power and duty to determine when any portion of the tidelands might be declared no longer necessary for trust purposes, and therefore be released from the trust. That the state in its sovereign capacity retained such power and duty is clearly indicated in several cases. (Boone v. Kingsbury, 206 Cal. 148, 184, 191 [273 P. 797]; Atwood v. Hammond, supra, 4 Cal.2d 31, 38-43; City of Newport Beach v. Fager, 39 Cal.App.2d 23, 29 [102 P.2d 438]; Illinois Central R. Co. v. Illinois, supra, 146 U.S. 387, 453-455), and is clearly implied in City of Long Beach v. Morse, supra, 31 Cal.2d 254, which was based upon the “absence of a legislative provision” finding that the proceeds were no longer required for trust purposes. As was said in City of Newport Beach v. Fager, supra, at page 29: *221“. . . by virtue of the prior grants to the city, the state has divested itself of all interest in such land excepting its interest as the sovereign in protecting the public trust .” (Emphasis added.) In other words, the only right reserved by the state with respect to the tidelands or their proceeds was its sovereign right to protect the trust and to declare when, if ever, any portion of such lands or their proceeds might no longer be required for the trust purposes and might be released from the trust without any substantial impairment of the trust purposes. In the present case the Legislature has exercised that right and has released the disputed proceeds by the 1951 enactment. (Stats. 1951, p. 2443.)
The majority opinion declares that the solution of the present problem depends upon “the validity and effect of the 1951 statute revoking in part the public trust on the income derived from the lands in question. Thus, the principal issues to be resolved in the present case are whether the revocation was a valid exercise of the legislative power, whether the revocation operated as a transfer from the state to the city of the monies affected thereby, and, if so, whether such a transfer would offend the constitutional prohibition against gifts of public moneys.” (Emphasis added.)
Thus the entire majority opinion is based upon the theory that the Act of 1951 was a partial “revocation” of a trust created by the state and a “transfer from the state to the city of the monies affected thereby.” I agree that the solution of the problem depends upon the validity and effect of the 1951 statute, but I cannot agree with the reasoning of the majority opinion. It treats the state as the “trustor” or “settlor,” with the property reverting “to the settlor” upon the termination of the trust; whereas, as heretofore indicated, the state was itself only a trustee with respect to the public trust under which the tidelands were previously held by it, and it had previously conveyed all its proprietary interest to the city. This court has clearly declared that the title to the tidelands, and therefore to the proceeds thereof, was thereafter in the city, not the state, subject only to the trust, for “whatever the state had by way of title or interest, . . . it all passed under the plain words of the grant” to the city of Long Beach; and that such conveyance carried with it “the mineral rights in the land.” (City of Long Beach v. Marshall, supra, 11 Cal.2d 609, 615, 616.)
It follows that the Act of 1951 was not a “revocation” of any trust in any true sense of the word. The state was *222not the trustor or settlor to which the lands or their proceeds would revert upon the termination of the trust. It is true that the state’s grant to the city employed the words “in trust for the uses and purposes and upon the express conditions following ...” (City of Long Beach v. Morse, supra, 31 Cal.2d 254, 256); but the grant did not create the trust, which already existed and under which the state itself held the property as trustee, and said grant merely imposed such conditions as the state deemed necessary to protect such preexisting public trust. Following the grant to the city the tidelands and the proceeds therefrom belonged to the city of Long Beach, subject only to the trust, and hence the exercise of the sovereign power by the state in 1951, in declaring a portion of the proceeds released from the trust, did not in any sense effect a “transfer” of anything “from the state to the city.” It therefore appears that the claim that the Act of 1951 was invalid under section 31 of the Constitution cannot be sustained. The majority opinion concedes that the original grants of the tidelands to the cities “do not violate the constitutional prohibition against gifts,” and it follows that the exercise by the state of its power to release a part of the tidelands or the proceeds from the trust is merely an exercise of the limited power retained by the state in its sovereign capacity following the original grant of all its right, title and interest in said tidelands. The validity of such a release was sustained in Atwood v. Hammond, supra, 4 Cal.2d 31.
It may be conceded that the majority opinion, by starting from an erroneous premise, reads quite plausibly. The erroneous premise, however, appears to be unfortunate, for the premise itself does violence to the principles laid down in the authorities, and more particularly to those clearly enunciated in Atwood v. Hammond, supra, 4 Cal.2d 31, and City of Long Beach v. Marshall, supra, 11 Cal.2d 609. Furthermore, the conclusions reached run contrary to the principles laid down in those cases and the other authorities above cited. These authorities sustain the judgment of the trial court.
It may well be that the state, as a matter of policy, should have reserved to itself the mineral rights in the Long Beach tidelands. It has made such reservation in later grants to other cities and counties, such as Santa Barbara (Stats. 1931, p. 1742), Ventura (Stats. 1935, p. 869), and Santa Cruz (Stats. 1935, p. 1876). The fact remains, however, that the state did *223not make any similar reservation in the grant to the city of Long Beach, and I find no justification for now declaring, contrary to the principles enunciated in the prior decisions of this court, that the state has any right, title or interest therein or to the proceeds therefrom.
In my opinion, the judgment of the trial court should be affirmed.
Schauer, J., concurred.