People ex rel. Bd. of State Harbor Comm'rs v. Broadway Wharf Co.

By the Court, Sanderson, J.:

This is an action to recover possession of Broadway Wharf in the City and County of San Francisco. A recovery was had in the Court below and the defendant appeals.

The alleged right to the possession, on the part of the State Harbor Commissioners, is founded upon an Act of the Legislature of the 24th of April, 1863, to provide for the improvement and protection of the wharves, docks and water front of the City and County of San Francisco. By that Act the Board of State Harbor Commissioners was created and they were directed and empowered' to take possession of the water front, from the line established by the Act of the 26th of March, 1851, to the distance of six hundred feet into the bay, together with all the improvements, rights, privileges, franchises, easements and appurtenances connected therewith, except such portions as were then held under valid leases. (Statutes 1863, p. 406.)

The right to the possession on the part of the defendant is founded upon a lease made by the Commissioners of the Funded Debt of the City of San Francisco, on the 31st day of January, 1861, and which will not expire until the 1st day of May, 1871. Whether this is a valid lease or not, is the ultimate question.

A decision of this question involves the construction of a number of statutes passed by the Legislature, chiefly at its session in 1851, which do not seem to have been dictated by a policy altogether consistent; and a brief history of these Acts and the circumstances under which they were passed is deemed essential to a proper understanding of the question.

Prior to the adoption of the State government, the officers of the city government of San Francisco assumed, to some extent, governmental functions in relation to the water front, and- undertook to provide for the erection and management of wharves, docks and piers.

On the 15th of April, 1850, the city was incorporated, and among the powers conferred upon the Mayor and Common Council was the power “ to erect, repair and regulate public wharves and docks; to regulate the erection and repair of private wharves and to fix the rate of wharfage thereat.” (Statutes 1850, p. 227.)

On the 23d of August, 1850, an ordinance was passed by the Common Council by which the city undertook to provide a Sinking Fund for the payment of its existing indebtedness, and to create a Board of officers to administer the fund under the style of the Board of Commissioners of the Sinking Fund. In furtherance of this object, the city, by ordinance, caused a conveyance of certain city property to be made to the Commissioners, to be held by them in trust for the purposes aforesaid. Assuming to be the owner of certain wharves known as the Taylor Street, Broadway, Central, Pacific Street and Market Street Wharves, the city caused them to be included in the conveyance.

On the 13th of February, 1851, the Commissioners of the Sinking Fund entered into a contract of lease' with one Francis Salmon, by which they undertook to lease to him the Broadway Wharf for a term of seven years, with the right to extend the same to a point not exceeding five hundred feet beyond the eastern line of Front street. This contract was subsequently confirmed by an Act of the Legislature passed on the 1st of May, 1851 (Statutes 1851, p. 313), and thereafter on the 9th of June, 1851, Salmon assigned to the defendant, the Broadway Wharf Company.

On the 26th of March, 1851, “An Act to provide for the disposition of certain property belonging to the State of California”—commonly called the Beach and Water Lot Act—was passed, by which certain property of the State therein described was granted to the city for the term of ninety-nine years, upon certain conditions. The last section of this Act provided that nothing therein contained should be construed as a surrender by the State of her right to regulate the construction of wharves or other improvements, so that they should not interfere with the shipping and commercial interests of the bay and harbor of San Francisco. (Statutes 1851, p. 307.)

On the 15th of April, 1851, the city was reincorporated. (Statutes 1851, p. 357.) The same power over wharves which was conferred by the first charter was continued in the second ;' and it was further provided that all money received by the city from: First—the net proceeds of all sales of real estate; second—the net proceeds of all bonds and mortgages payable to the city; third—for the occupation of private wharves, basins and piers; fourth—for wharfage, rents and tolls, should continue to constitute a sinking fund for the payment of the existing city indebtedness, and should not be expended for any other purpose. (Sec. 14, Art. III.) And in this connection it was further provided that the Common Council should, at an early day, take steps to fund by ordinance the existing debt of the city (Sec. 15, Art. III); and the Commissioners of the Sinking Fund were prohibited from permanently disposing of any property in their possession belonging to the city by sale, lease or otherwise, and required to reconvey and deliver to the city before the tenth of the ensuing May all property, titles, rights and interests belonging to the city. (Sec. 17, Art. III.)

On the 1st of May, 1851, “An Act in relation to the City of San Francisco” (Statutes 1851, p. 311) was passed, by which ‘the city was authorized and empowered to construct wharves at the ends of all the streets which terminate on the bay by extending the streets into the bay not exceeding six hundred feet beyond the water line as established by the Act of the 26th of March, 1851, and to prescribe the rates of wharfage. By the second section of this Act certain beach and water lot property was relinquished upon certain conditions to the city.

On the same day an Act to fund the floating debt of the city and provide for its payment was passed, by which the present Board of Commissioners of the Funded Debt of the City of San Francisco was created. By this Act the seventeenth section of Article III of the Act of the 15th of April, 1851, reincorporating the city which directed the Commissioners of the Sinking Fund to reconvey to the city was repealed, and they were required to convey to the Commissioners of the Funded Debt, “ all the property, and all the rights,.titles and interests in property belonging to said city; and to pay over into the hands of said Commissioners any funds, notes, securities or other assets belonging to said city which they had received by virtue of the Third Article of the city charter of the 15th of April, 1851; and thereafter, in. the same section, the Commissioners of the Funded Debt are authorized, at such .time and place as in their judgment the interest of the city may require, to expose at public sale, or to lease the property to be conveyed to them, and to apply the proceeds of such' sales or leases to the liquidation of the floating debt of the city. The thirteenth section of Article III of the city charter "of 1851, which required the Common Council, at an early day, to take steps to fund by ordinance the floating debt of the city was also repealed. (Statutes of 1851, p. 387.)

On the 24th of May, 1851, the Commissioners of the Sinking Fund conveyed to the Commissioners of the Funded Debt, and included in their conveyance the five wharves hereinbefore mentioned.

On the 31st day of December, 1856, the Commissioners of the Funded Debt leased Broadway Wharf to the defendant for the term of seven years, and subsequently, on the 31st day of January, 1861, gave a further lease, which will not expire until the 1st day of May, 1871. By their leases the Commissioners only undertook to lease whatever interest they had in the premises, without any warranty or guaranty whatever, and without any covenant for quiet enjoyment, thus showing a want of faith on their part in the validity of the transaction.

Commissioners of Sinking Fund had no power to convey wharves in San Francisco.

Parts of the foregoing account have but little to do with the question before us, and have been given mainly as contributing to historical completeness and as exhibiting all the conditions in view of which the Legislature may be presumed to have acted. This is true of the city ordinances relating to the Commissioners of the Sinking Fund, the conveyance from the city to them, and from them to the Commissioners of the Funded Debt, the lease to Salmon, the Act of the Legislature confirming it, and his assignment to the defendant; for the ordinance creating the Commissioners of the Sinking Fund, and the deed from the city to them, were both null and void for the want of power in the city, (Smith v. Morse, 2 Cal. 524; Heydenfeldt v. Hitchcock, 15 Cal. 514,) so no effect was thereby produced upon the title to any part of the city front. And the same is true of the deed from the Commissioners of the Sinking Fund to the Commissioners of the Funded Debt, by itself considered, for having taken nothing by the deed from the city, the former had nothing to convey to the latter; so whatever the latter took they took by force of the Funding Act, and hence neither the deed from the city to the Commissioners of the Sinking Fund, nor the deed from the latter to the Commissioners of the Funded Debt, served any useful purpose except to point out what particular property belonging to the city was intended to be conveyed to the Commissioners of the Funded Debt by the Funding Act.

Confirmation of Broadway Wharf lease.

So with the Salmon lease. It was void until confirmed by the Legislature, because the Board of Commissioners of the Sinking Fund was a void Board, and the Act confirming it had no further effect than to confirm it according to its terms, and by its terms it was to expire at the end of seven years. So at the end of that time the Broadway Wharf, in respect to title, reverted to its former condition, so far as affected by the lease or the confirmatory Act. By the Act the State made the contract her own, and vested in Salmon and his assigns the estate thereby attempted to be created, but vested in them no other or greater estate, and Vested no estate whatever in the city or any one else.

So, for all the purposes of final judgment, the several matters referred to in this connection may be discarded as having no controlling effect, leaving the case to stand upon the city charters of 1850 and 1851, the Beach and Water Lot Act, the Act in relation to the erection of wharves at the ends of all the streets by extending the streets into the bay, and the Funding Act. It is upon them that the strain comes, and it is from them that the validity of the title of the defendant’s lessor’s to the property in question is to be ascertained.

Where so much legislation is invoked for the purpose of establishing a grant by the State, one instinctively suspects that the alleged grant rests upon a slender foundation, or lies in inference rather than direct expression. If the State has relinquished to the city, or the Commissioners of the Funded Debt, property of so much commercial value, and so deserving of the fostering care of the Government, as the water front of the City of San Francisco, we might reasonably expect to find the Act authenticated, in view of the mode uniformly adopted in such cases, by some well defined and formal grant, about which there could be no misapprehension; but the most cursory glance, at the various Acts relied upon for the purpose of establishing a grant in the present case, shows that such is not the fact.

Funding Act.

We have already quoted from the Funding Act all that is material to the present purpose, and it need not be repeated. It is clear that no interest passed thereby directly from the State to the Commissioners of the Funded Debt. The Act is cautiously worded and the property thereby intended is guardedly described throughout as “ belonging to the city.” In view of this description no property then belonging to the State can be regarded as having passed by force of the Act. For the purposes of the Act the Legislature assumed that the Commissioners of the Sinking Fund were in the possession of certain property “ belonging to the city.” This property the Legislature directed them to convey to the Commissioners of the Funded Debt; but they were not directed to convey any property which did not respond to that call, and if they undertook to do so their act was so far altogether nugatory. If, then, the Commissioners of the Funded Debt became vested with the title to the wharf property described in the deed to them, for the purposes of their trust, they did so because at that time the property in question belonged to the city and •not to the State. Whether it did or not depends upon the construction of the other Acts already named. Those Acts, so far as they touch upon the subject in hand, are in pari materia, and must be read together.

City charters of 1850 and 1851.

The language of the city charters, by which it is claimed that the State has relinquished the property in question to the city, is found in those parts of the charters which are devoted to a specification in detail of the several powers which are to be conferred upon the city government. The sections which contain this language start off in the usual and ordinary forms approved in such cases: “ The Common Council shall have power within the city to pass all proper and necessary laws for the regulation and improvement,” etc. Then follows an enumeration of the various subjects of municipal legislation, including the erection and repair of wharves, docks and piers, which are mentioned in the same breath and with as little emphasis as streets, roads, bridges, fences, alleys and sewers ; all- of which are put upon the same level with wharves, and the power over each is not different, but is of the same municipal complexion. Obviously this is not the language of a grant of a proprietary interest in property. It is but a grant of power to pass all proper and necessary laws for the regulation of such matters as ordinarily fall within the jurisdiction of municipal bodies. It is a grant of municipal power only, and thereby the city acquired no proprietary rights which she would not have otherwise possessed. Under this power to erect and repair wharves and to fix the rates of wharfage, she was undoubtedly enabled to take the revenues to be derived therefrom, but she took them upon precisely the same terms upon which she took those derived from property and license taxes, without any interest in the property taxed or the business licensed, and enjoyed them, as she enjoyed the latter, at the will and pleasure of the State. This power was purely governmental. The Legislature possessed it, but saw proper not to exercise it for a time directly through its own immediate legislative department, but to do so mediately through the legislative body of the subordinate local government. The State could have exercised this power in either mode, and she saw proper to adopt the latter.

Act extending streets into the hay.

The same is true of the Act relating to the extension of the streets into the bay, by the construction of wharves. That it was not intended by the language there used to relinquish to the city a proprietary interest in the property of the State lying outside of the beach and water lot line, aside from the obvious scope of the language itself, is made still more apparent by contrasting it with that used in the next section which relates to the beach and water lot property. There the language is: “ The right of the State to the beach and water lot property in the City of San Francisco is hereby relinquished to said city,” which is of a very different import. The latter is a grant of the State’s proprietary interest in the property; while the former is but the delegation of municipal power over the subject of precisely the same legal complexion as that given in the city charters already considered and in the subsequent charters of 1855 and 1856.

If further testimony as to what the Legislature intended by the language so far considered be required, it may be found in the express declaration of that body, contained in the last section of the Beach and Water Lot Act, which proceeds upon the theory that up to that time, in the judgment of the Legislature, they had not relinquished the title of the State to the city. That the title was still in the State, notwithstanding the city charter of 1850, is there clearly assumed, if not declared, and the charter of 1851 certainly conferred no greater rights than that of 1850.

Commissioners of Funded Debt.

We now come to the fourteenth section of Article III of the city charter of 1851 which is relied on as vesting in the city, and, subsequently, under the operation of the Funding Act, in the Commissioners of the Funded Debt, a right-to the revenues to be derived from the wharves, at least until the object of the trust should be in all respects accomplished. It provides that all money to be received by the city from certain sources which are named, including wharfage, rents and tolls, shall continue to constitute a Sinking Fund for the liquidation of the city debt, and shall be used for no other purpose.

At the. time the legislative mind was at work upon the charter of 1851 it was obviously intended to confer upon the city government the power which the city had attempted to exercise under the charter of 1850, when it undertook to create a Sinking Fund by tine ordinance of the 23d of August of that year. The Legislature then recognized, at least, the da facto existence of such a fund, and provided that all money to be received from certain sources should continue to go into that fund; and thereafter, in the next section, directed the Common Council to take steps at an early day to fund the debt of the city ; and in the second succeeding section prohibited the Commissioners of the Sinking Fund from making any further disposition, by sale, lease, or otherwise, of the property belonging to the city and assumed to be in their possession, and required them to reconvey the same to the city on or before a certain day. From all this it is clear that at that time the Legislature intended to vest the city with power to fund her debt in her own way, and to endow her with the management and control of the wharves and their revenues, for the purpose of paying the debt, without, however, vesting in her any proprietary interest in the wharves or the power to erect them in such a manner as to interfere with the shipping or commercial interests of the harbor, which the city was bound to respect under the provisions and conditions of the Beach and Water Lot Act. Had this scheme been finally adopted it may be conceded that the city would thereby have become entitled to the management and control of the wharves with a view to the enjoyment of their revenues until the Act was repealed or the funded debt paid; or, at least, that such creditors as might have elected to fund their claims would have obtained a hold -upon those revenues from which they could not have thereafter been released by any independent action on the part of the State until such claims had been fully paid. But this scheme was not finally adopted; on the contrary, it was abandoned, and another which was on foot at the time, but of an entirely different character, and which found expression in the Funding Act, was adopted in its stead. Instead of allowing the city, as at first proposed, to devise and carry out a plan for funding her debt, the State took the matter out of her hands and undertook the task directly by passing the Funding Act. Thereby certain property belonging to the city in a proprietary sense, and only such, as we think we have already shown, was set apart as a fund with which to liquidate the city debt, and in case of a deficit the Commissioners appointed to take charge of the matter were authorized to draw on the city for an amount sufficient to pay interest and supply the further sum of fifty thousand dollars annually, as a Sinking Fund for the redemption of the city stock which they were authorized to issue to the creditors of the city in exchange for their claims. But neither the wharves nor wharfage was so set apart or vested in the Fund Commissioners, nor the power over the same which the city acquired by her charters.

What would have been the result had the city undertaken to improve the water front and cause wharves to be erected, and for that purpose had entered into contracts of the character of that made by the Commissioners of the Sinking Fund with Salmon, or of the present contract by the Commissioners of the Funded Debt with defendant, it is idle to inquire. It may be conceded that the contractors with the city would have acquired by such contracts rights which the State could not have impaired. Upon that score it is sufficient to say that the city never undertook to exercise the power which she possessed, although it was continued to her by the charters of 1855 and 1856 in precisely the same language, and was an existing power until the passage of the Act of 1863, by which the State resumed the power and undertook the improvement of the harbor through the instrumentality of the Board of State Harbor Commissioners. The city could not transfer its merely governmental powers to the Commissioners of the Funded Debt, and, if it could, it has never attempted to do so. The power to authorize the construction of wharves and to lease and dispose of them was not vested in the Commissioners of the Funded Debt.

It results that the Commissioners of the Funded Debt never acquired any control over or interest in the Broadway Wharf or its revenues, and that the lease under which the defendant now holds it is not valid within the meaning of the Act of 1863.

Statute of Limitations.

The point founded upon the Statute of Limitations comes too late. If, in any event, the bar of the statute was available, it should have been taken advantage of by demurrer or answer. (Brown v. Martin, 25 Cal. 82.) This was not done, and it is too late to seek its shelter for the first time in this Court. In both of the cases cited by counsel, (People v. Van Rensselaer, 9 N. Y. 318, and People v. Trinity Church, 22 N. Y. 46,) the statute was pleaded.

Judgment affirmed.