Court Opinion

ID: 9630104
Source: CourtListenerOpinion
Date Created: 2023-08-22 10:00:21.292494+00
Date Added: 2024-06-11T09:33:10.407807
License: Public Domain

SCHAUER, J.
I dissent. Two questions are presented for decision: (1) Does the proposed use by the city of Long Beach of revenue from oil production on the tidelands granted it *263by the state violate the “trusts upon which said lands are held by the State of California?” (2) Does such proposed use violate any other trust or condition imposed by the grant from the state ?
The original grant from the state to the city of Long Beach (Stats. 1911, p. 1304) conveyed “all the right, title and interest of the State ... in and to all the tide lands and submerged lands . . . within the present boundaries of said city, . . . to be forever held by said city, and by its successors, in trust for the uses and purposes, and upon the express conditions following, to wit:
“ (a) That said lands shall be used by said city and by its successors, solely for the establishment, improvement and conduct of a harbor, and for the construction, maintenance and operation thereon of wharves . . . and other utilities, structures and appliances necessary or convenient for the promotion and accommodation of commerce and navigation, and said city . . . shall not . . . grant, convey, give or alien said lands ... to any individual, firm or corporation for any purpose whatsoever; provided, that said city, or its successors, . . . may lease said lands, or any part thereof, for limited periods, for purposes consistent with the trusts upon which said lands are held by the State of California and with the requirements of commerce or navigation at said harbor; . . . Reserving, however, in the people of the State of California the absolute right to fish in the waters of said harbor, with the right of convenient access to said waters over said lands for said purpose.” (Italics added.)
1. The trusts upon which the involved lands are or were held by the State do not preclude the city of Long Beach from arranging for the extraction of oil from such lands or from devoting the revenues of such lands to general municipal purposes.
It has already been decisively established in this state that the drilling for oil on state tidelands, pursuant to permit from the state, is a purpose " consistent with the trusts upon which said lands are held by the State of California and with the requirements of commerce or navigation, ’ ’ provided only that no substantial interference with navigation, fishing or commerce results. The specialized nature and limits of the trusts involved were extensively examined and explained in Boone v. Kingsbury (1928), 206 Cal. 148 [273 P. 797]. In considering the power of the state to permit drilling operations on *264portions of its tidelands, this court declared (p. 186 of 206 Cal.), “It may be said of the situation that the coast line at the point in question is an unnavigable portion of a vast body of navigable water, and the use to which the state proposes to devote the soil, from a practical point of view, would not be incompatible with, or in ‘derogation of the government’s trust to preserve needed navigable waters for the benefit of the people.’ [Citation.] . . .
“No uncertainty can exist as to the rights of the state to absolutely alienate its tide and submerged lands when they are unfit for navigation, are useless as aids of commerce and possess no substantial value as fishing grounds. The policy of this state is and has always been to encourage its citizens to devote waste and unused lands to some useful purpose. The power of the state to absolutely alienate lands perpetually covered by water has been upheld by all courts of the nation, state and federal, where the land so covered was severed from the main body by harbor and other improvements in such manner as to leave the remaining waters of no substantial use to navigation or commerce. It is only in those cases where the reduction of the water area amounts to a substantial interference with navigation and commerce or the fisheries that the absolute power of alienation by the sovereign and its control and dominion over said lands can be questioned. . . .
“ [p. 187] The rule to be kept in mind and which is recognized by every case bearing on the subject ... is that the state has the unquestionable right to alienate its tide and submerged lands subject to the ‘trust in which they are held for the people of the state that they may enjoy the navigation of the waters, carry on commerce over them, and have liberty of fishing therein free from the obstruction or interference of private parties. ’ . . .
“ [p. 189] The state cannot abdicate its trust over property in which the whole people are interested, like navigable waters and soils under them, so as to leave them entirely under the use and control of private parties, except in the case of parcels used in promoting the interest of the public therein, or when parcels can be disposed of without impairment of the public interest in what remains. . . .
“The trust in which tide and submerged lands are held does not prevent the state from reclaiming tide and submerged lands from the sea where it can be done without prejudice to the public right of navigation and applying them to other *265purposes and uses. As said in Ward v. Mulford, 32 Cal. 365:
“ ‘There are large tracts of salt marsh lands, of which the land in suit is an example, which are covered and uncovered By the flow and ebb of the neap tides, and therefore belong to the state by virtue of her sovereignty, which are of no possible use for the purposes of navigation, but may be valuable for agricultural or other purposes if reclaimed from the tides. Such lands the state may undoubtedly grant in private ownership for the purposes of reclamation and use, for by such a course no right of the public to their use for the purposes of navigation would be prejudiced. On the contrary, the right of navigation, in many cases, might be subserved by such reclamation.’ ” The court further pointed out that (p. 184) “should said permittees [in drilling operations] offer any substantial interference incompatible with navigation, fishing or commerce, the state and federal government would have the unquestionable right to abate it.” (Italics added.)
Among the definitions given by Webster for consistent is “compatible,” and among those for compatible is “consistent. ’ ’ Since the means of producing the funds here in question is consistent with “the trusts upon which said lands are held by the State” (as expressly held in City of Long Beach v. Marshall (1938), 11 Cal.2d 609, 620 [82 P.2d 362]) then it follows that the use of the funds for any purpose other than such as would cause positive physical interference with such trusts is also consistent therewith. The opinion of Justice Traynor cites City of Long Beach v. Lisenby (1917), 175 Cal. 575, 579 [166 P. 333], as authority for the statement that “The original grant has been interpreted as providing for a trust for public purposes and as not creating a ‘trust to carry on a commercial enterprise unaffected by a public use. ’ ’ ’ The discussion in the Lisenby case is directed to the point that since a “trust” in tidelands is for a public purpose rather than a private commercial purpose, the city may. accept and administer it. The case contains nothing contrary to my views here. Certainly the production of oil and gas from tidelands and the use of proceeds therefrom for general municipal purposes is ‘ ‘ affected by a public use. ”,
It should be noted that from a holding that the city must devote the proceeds from the oil and gas production solely to purposes of navigation and commerce or be held to be acting in violation of “the trusts upon which” the state holds the lands for the people it would also inescapably follow that thé *266state (and presumably the federal government) must likewise devote its entire income from tidelands oil and gas production as well as from other uses or dispositions which might be made of tidelands not needed for navigation, commerce, or fishing, to the same limited purposes or itself violate such trusts. Is a majority of this court prepared to so hold? In that case, any excess of oil and gas income over expenditures for navigation purposes will seemingly be required to be held unused in the respective governmental treasuries. It is unequivocally held in City of Long Beach v. Marshall (1938), supra, 11 Cal.2d 609, 612, 620, and Miller v. Stockburger (1938), 12 Cal.2d 440, 444 [85 P.2d 132], that as between city and state the proceeds of oil production here involved belong to the city.
2. The grant from the state to the city, reasonably construed, does not preclude the allocation which the city proposes to make of revenue from the conveyed lands.
Firstly, in granting lands to the city “in trust for the uses and purposes, and upon the express conditions” that they be used solely for harbor and navigation purposes and reserving fishing rights to the people of the state, it seems apparent that the state employed the word “trust” in the same specialized sense which the word carries when the “trusts” upon which the state itself holds tidelands are considered; i.e., that navigation, commerce and fishing purposes are of paramount concern, but that other uses may be made of the lands if such paramount purposes remain substantially unimpaired. Therefore, cases having to do with the power and duties of trustees of privately owned property are not controlling here. Nor are the grounds for the decision in Provident Land Corp. v. Zumwalt (1938), 12 Cal.2d 365 [85 P.2d 116] present here. Both the nature of the trust upon which the lands there concerned were granted for irrigation purposes and the rights of the bondholder “beneficiaries” differ from those involved in this action. Under the terms of the grant here it appears that the city is limited only by the limitations applicable to the state in the use to be made of income from tidelands.
Secondly, the proviso that the city “may lease said lands . . . for purposes consistent with the trusts upon which said lands are held by the State of California and with the requirements of commerce or navigation at said harbor” certainly is a broad enough exception to the limitations otherwise imposed to authorize the leasing of the lands for oil extraction; surely the word “lease” imports a consideration to be paid to the lessor; and, equally surely, the omission of any limitation *267upon application of the revenues to be received by the lessor leaves it free to devote such revenues to the best public use as it may determine from time to time. As seen above, nothing in “the trusts upon which said lands are held by the State of California” or in “the requirements of commerce or navigation at said harbor” precludes the leasing of the lands for oil development and operation so long as the fishing rights of the people and the harbor uses are not interfered with. The leasing of such lands for oil operations, under conditions protecting the harbor usages and “the absolute right [of the people] to fish in the waters of said harbor, with the right of convenient access to said waters over said lands for said purpose” (Stats. 1911, p. 1305) is entirely consistent “with the trusts upon which said lands are held by the State of California and with the requirements of commerce or navigation at said harbor.” Consequently, oil production on the lands under lease with use of the proceeds thereof for general municipal purposes does not violate the terms of the grant from the state. It would seem that, except as limited by the city charter, even revenues from harbor operation could be devoted by the city to such purposes as it chooses. It must use the land solely for the purposes specified in the grant, subject to the exceptions provided therein, but there is no direction in the grant as to the source of revenue to be devoted to carrying out such purposes and no limitation upon the use of revenues derived from the lands. On the contrary the grant provides that “said harbor shall be improved by said city without expense to the state . . . and the State . . . shall have, at all times, the right to use, without charge” all facilities thereof. The subsequent amendments to the grant of 1911, whatever their purpose, certainly cannot have the effect of divesting rights conveyed by the original grant.
Furthermore, if any doubt might otherwise exist as to the right of the city to effect the interfund transfer of moneys in question, it seems to me that it is dispelled by the act of the state in consenting to the Long Beach City Charter amendment of 1946. (Stats. 2d Ex. Sess. 1946, ch. 6, p. 366.) Section 229x of the charter, as amended, provides: “In addition to all other powers with which the Board of Harbor Commissioners is now or may hereafter be invested, and notwithstanding anything in this Charter to the contrary, said Board shall have the power to drill for, develop, extract . . . and dispose of, oil . . . from . . . any and all lands, includ*268ing all tidelands, submerged and overflowed lands. . . . Provided . . . that before such power may be exercised as to tidelands, submerged and overflowed lands . . . said Board shall first determine, by resolution, that such lands ... intended to be so used are not required . . . for the promotion or development of commerce, navigation or fishery. . . . Any and all moneys derived by the City . . . from the development of oil . . . shall be apportioned as follows: . . . The City Treasurer shall ... at least once each calendar month transfer twenty-five per centum (25%) of all moneys hereafter derived by the City . . . from the development of oil .... . from beneath the lands constituting the Harbor District . . . which by the provisions of this subdivision are required to be paid into the ‘Harbor Révenue Fund,’ from said ‘Harbor Revenue Fund’ to the ‘Public Improvement Fund,’ which said fund is hereby created and established; provided said transfer shall be made only in the event that such moneys may be used and expended for the purposes hereinafter stated without violating the provisions of grants by which the City acquired . title to all tide and submerged lands from the State of California. . . . The moneys ... in the ‘Public Improvement Fund’ shall be used exclusively for the payment of costs and expenses for construction, reconstruction, repair and maintenance of public improvements, including the purchase of such land, rights and properties as may be necessary therefor, as shall have been provided for in the official budget of the City. ...”
As shown above there is nothing in the authorized uses of .funds above provided for which is inconsistent with “the trusts upon which said lands are held by the State of California and-with the,requirements of commerce or navigation at said harbor.” It is already established by City of Long Beach v. Marshall (1938), supra, 11 Cal.2d 609, 620, that “the city has the right to drill for and extract the oil from these lands which it owns,” and that, as noted above (p. 612, 616), “the mineral rights” as between state and city “are owned by the municipality. ’ ’ Furthermore, the defendant city treasurer is in no position to claim a breach (either actual or potential) of the grant from the state. The state, by approving the charter provisions above, quoted, must be understood to have consented to the specified uses of the money provided that such uses would not, even though approved by the state, violate “the provisions of grants by which the City acquired title to *269all tide and submerged lands from the State. ’ ’ That the Legislature so qualified its approval of the designated uses of the funds is but consistent with the request of the city and with the terms of the original grant (Stats. 1911, p. 1304), which required that any leasing of the lands be “for purposes consistent with the trusts upon which said lands are held by the State of California and with the requirements of commerce or navigation at said harbor.’’ (Italics added.) It appears to me that, subject to those trusts and priorities, the state, by approving the charter provisions above quoted, must be understood to have consented to the allocation and use of the. moneys as specified. No other purpose was served by its action, which is not to be deemed meaningless. Having so consented it should not be permitted, in the absence of a showing of actual or potential breach of those conditions, to prevent the use of the moneys for the very purpose authorized. Certainly a Public Resources Code section (§ 6875) adopted in 1941 (based on Stats, of 1938) and quoted in the majority opinion cannot supply an interpretation of a 1946 legislative approval of a city charter amendment—and, surely, in the face of the Marshall and the Stoekburger cases, supra (11 Cal.2d 609 and 12 Cal.2d 440), the Legislature may not (as seems to be suggested by the opinion of Justice Traynor, it intends to do) “interpret” to itself or its agents the right to drill on Long Beach tidelands. Of course no such attempt appears to have been made by the Legislature; in section 6875 of the Public Resources Code, it is doubtless referring to such tidelands grants as that to Santa Barbara, mentioned at page 618 of the Marshall case, in which the state reserved the mineral rights in the lands. The state cannot and does not here attack the purpose for which the funds are proposed to be used and the defendant city treasurer manifestly is in no better position than the state to resist the city’s action.
It is regrettable that the majority opinion by strained legalisms attains the ends of a wastage of public property and the wholly unnecessary imposition of additional taxes upon long suffering taxpayers.
Under the circumstances shown, the plaintiff city is entitled to the writ.
Spence, J., concurred.
Petitioner’s application for a rehearing was denied January 26, 1948. Sehauer, J., and Spence, J., voted for a rehearing.