FELIX MALLON, Plаintiff and Appellant, v. CITY OF LONG BEACH (a Corporation) et al., Respondents; ALMA SWART, Intervener and Appellant.
L. A. No. 23176
In Bank
Apr. 5, 1955
The petition of Respondent City of Long Beach for a rehearing was denied May 4, 1955.
44 Cal.2d 199
Theodore R. Gabrielson and Kenneth E. Matot for Intervener and Appellant.
Preston, Braucht & George, Crowe, Mitchell & Hurlbutt, Neil Cunningham and J. Thomas Crowe as Amici Curiae on behalf of Intervener and Appellant.
Edmund G. Brown, Attorney General, E. G. Benard, Assistant Attorney General, Leonard M. Friedman and George G. Grover, Deputy Attorneys General, as Amici Curiae on behalf of Appellants.
Walhfred Jacobson, City Attorney, Joseph B. Lamb, Assistant City Attorney, Atlee S. Arnold, Deputy City Attorney, O‘Melveny & Myers, Louis W. Myers, Pierce Works and William W. Alsup for Respondents.
Roger Arnebergh, City Attorney (Los Angeles), Bourke Jones and Arthur W. Nordstrom, Assistant City Attorneys, as Amici Curiae on behalf of Respondents.
TRAYNOR, J.----Plaintiff and plaintiff in intervention appeal from a judgment for defendants entered after defendants’ demurrers to their complaints were sustained without leave to amend. Plaintiffs sought to enjoin defendants from appropriating and expending for general municipal purposes the income derived from the sale of oil and gas produced from the tide and submerged lands granted in trust to the city of Long Beach by the State of California. (Stats. 1911, p. 1304, as amended by Stats. 1925, p. 235, Stats. 1935, p. 793, and Stats. 1951, p. 2443.) The expenditures to which plaintiffs object are purportedly authorized by a duly enacted amendment to the charter of the city of Long Beach, the material parts of which provide:
“The ‘Public Improvement Fund’ is hereby created and established. . . . Money placed therein shall be used exclusively for the payment of costs and expenses for the acquisition, construction, reconstruction, development, operation, repair and maintenance of public improvements and the acquisi-
tion of such lands, rights and property as may be necessary or convenient therefor. . . . “Within thirty days after the effective date of this seсtion, the City Treasurer shall transfer to the ‘Public Improvement Fund’ fifty per cent of all revenue derived by the City from oil, gas and other hydrocarbons, and fifty per cent of the interest, earnings, income and/or profits from investment of said revenue which is in the ‘Harbor Revenue Fund’ on the date of such transfer. Within said thirty days, he shall also transfer to the ‘Public Improvement Fund’ fifty per cent of all revenue in the ‘Harbor Reserve Fund’ and the ‘Tideland Oil Fund’ on the date of such transfer.
“At least once each calendar month thereafter, the City Treasurer shall transfer to the ‘Public Improvement Fund’ fifty per cent of all revenue derived by the City from oil, gas and other hydrocarbons and placed in the ‘Harbor Revenue Fund,’ which is not required by this Charter to be transferred from said ‘Harbor Revenue Fund’ to the ‘Harbor Reserve Fund.’ He shall also transfer to the ‘Public Improvement Fund,’ at least once each calendar month thereafter, fifty per cent of all revenue so derived, which is required by this Charter to be transferred to the ‘Harbor Reserve Fund’ and fifty per cent of all revenue, so derived, which is required by this chapter to be placed in the ‘Tideland Oil Fund.‘‘” (Charter of the city of Long Beach § 260.8, approved by concurrent resolution of the Legislature [Const., art. XI, § 8], Stats. 1953, p. 3826.)
The Harbor Revenue Fund (Stats. 1931, p. 2807), the Harbor Reserve Fund (Stats. 1949, p. 2857), and the Tideland Oil Fund (Stats. 2d Ex. Sess. 1946, p. 367; Stats. 1949, p. 2857) are depositories of the income derived from the production of oil and gas from the tide and submerged lands granted to the city by the state, except for the income derived from the production of “dry gas” from those lands, which is handled separately and is discussed below. Plaintiffs claim that the transfers authorized by this charter amendment and the expenditures pursuant thereto are unlawful. Defendants contend that the type of expenditures enumerated in the amendment are proper ones for a municipality to make, and that the transfers ordered by the amendment are authorized by chapter 915 of the Statutes of 1951. That statute provides:
“Section 1. It is hereby found and determined: That the City of Long Beach since 1939 has produced and is now producing large quantities of oil, gas and other hydro-
carbon substances from lands conveyed to said city by [the statutes cited above]. That from the revenue derived therefrom, said city has constructed upon said lands, wharves, docks, piers, slips, quays, and other utilities, structures and appliances necessary or convenient for the promotion and accommodation of commerce and navigation, at a cost of approximately thirty-five million dollars ($35,000,000). That said city has available and unexpended approximately seventy-five million dollars ($75,000,000), also derived from said source, for the uses and purposes required by said acts, and is now receiving and will continue to receive for many years approximately twenty-four million dollars ($24,000,000) per annum from said source. That, in addition thereto, said city obtains large quantities of ‘dry gas’ derived from natural gas produced from said lands, which is sold by said city to domestic and other consumers. That by reason of the already large expenditure on such lands for the uses and purposes required by said acts, the large additional sums available and to become available throughout the years for such purposes, the expenditure of more than a total of fifty per centum (50%) of such revenue, received and unexpended and hereafter to become available for such uses and purposes, would be economically impracticable, unwise and unnecessary. That fifty per centum (50%) of all revenue heretofore derived and unexpended, and to be derived, by the City of Long Beach from oil, gas and other hydrocarbon substances, other than ‘dry gas,’ produced from lands conveyed by said acts, is no longer required for navigation, commerce and fisheries, nor for such uses, trusts, conditions and restrictions as are imposed by said acts. That none of the revenue heretofore derived, and to be derived, by said city from ‘dry gas’ obtained from said lands is any longer required for navigation, commerce and fisheries, nor for such uses, trusts, conditions and restrictions as are imposed by said acts. “For the purposes of this act, ‘dry gas’ is defined to mean the gas directly produced from wells, which contains one-half of a gallon or less of recoverable gasoline per 1,000 cubic feet, or from which gasoline has been removed by processing.
“Sec. 2. That fifty per centum (50%) of all revenue heretofore derived and unexpended, and to be derived, by the City of Long Beach from oil, gas and other hydrocarbon substances, other than ‘dry gas,’ produced from lands conveyed by said above-entitled acts 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. That all of the revenue heretofore derived, and to be derivеd, by said city from ‘dry gas,’ obtained from said lands 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.)
The tide and submerged lands from which the monies in question are derived were originally owned by the State subject to a trust for purposes of commerce, navigation, and fisheries for the benefit of all the people of the state. (City of Long Beach v. Morse, 31 Cal.2d 254, 262; City of Long Beach v. Marshall, 11 Cal.2d 609, 614; Boone v. Kingsbury, 206 Cal. 148, 183, 189; City of Long Beach v. Lisenby, 175 Cal. 575, 579; People v. California Fish Co., 166 Cal. 576, 584, quoting from Illinois Central R. Co. v. Illinois, 146 U.S. 387, 452-453.) The Legislature committed the administration of this trust to the city of Long Beach (City of Long Beach v. Lisenby, supra, 175 Cal. 575, 579; and see
It is well established that “[t]he 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 purposes and uses.” (Boone v. Kingsbury, supra, 206 Cal. 148, 189; Illinois Central R. Co. v. Illinois, supra, 146 U.S. 387, 452-453; Atwood v. Hammond, supra, 4 Cal.2d 31, 41; Oakland v. Oakland Waterfront Co., 118 Cal. 160, 183-185; People v. California Fish Co., supra, 166 Cal. 576, 585-586; Ward v. Mulford, 32 Cal. 365, 372-373.) This principle has never been judicially applied in this state to the partial revocation of the public trust as to the income derived from the extraction of minerals imbedded in the lands subject to the trust, but the Legislature has devoted such income from tide and submerged lands held by the state to uses unconnected with the purposes of the public trust. (See Stats. 1921, chap. 303, § 19;
The next question is whether the revocation effected by the 1951 statute operates to transfer the monies involved to the state, as the рlaintiff in intervention contends, or whether it operates as a transfer of those monies to the city of Long Beach, as defendants contend. In an early case concerning title to former pueblo lands, which the state held subject to a public trust for “municipal purposes,” this court said that “[t]hrough such repeal [of the act by which the administration of the trust was transferred to the city of Monterey] the entire property held for public use—which would include the public lands—would revert to the state, and no limitation being imposed upon the legislature under the constitution of 1849* in that respect, could be then disposed of in any manner it saw fit.” (City of Monterey v. Jacks, 139 Cal. 542, 555-556, affirmed in 203 U.S. 360; see also San Francisco v. Canavan, 42 Cal. 541, 554-556; Hart v. Burnett, 15 Cal. 530, 624.) In
The reasoning in these cases is the same as that governing private trusts in which, in the absence of an express provision to the contrary, a revocation of the trust results in a reversion of the trust property to the settlor. (
Defendants also contend that the dictum in Atwood v. Hammond, supra, 4 Cal.2d 31, 44, that “the state could not by unilateral action divest the city of its title, nor annex a different use to this eighteen acre parcel [of reclaimed tidelands],” established the rule that although the state can terminate the public trust over such lands, the termination
Moreover, the construction of the 1951 statute for which defendants contend would result in its unconstitutionality.
County of Los Angeles v. Southern Calif. Tel. Co., 32 Cal.2d 378, on which defendants rely, is not inconsistent with this conclusion. That case involved the validity of franchises acquired under the provisions of
“Since the offer of a franchise in section 536, when accepted, results in a binding agreement supported by a valid consideration, there is no gift within the meaning of the constitutional prohibitions.” (32 Cal.2d at 388.)
It is suggested, however, that the expenditures purportedly authorized by section 260.8 of the charter of the city of Long Beach are expenditures for public purposes and thus that a transfer of the funds in question from the state to the city would not be a gift within the meaning of
Applying that principle to the рresent case, we cannot hold that the construction and establishment by the city of Long Beach of storm drains, a city incinerator, a public library, public hospitals, public parks, a fire alarm system, off-street parking facilities, city streets and highways, and other expenditures that have been authorized to be made from the “Public Improvement Fund,” are of such general state-wide interest that state funds could properly be expended thereon. Such expenditures are for purely “municipal affairs” within the meaning of
We conclude, therefore, that in view of the intendments in favor of the constitutionality оf a statute (Jersey Maid Milk Products Co. v. Brock, 13 Cal.2d 620, 636, and cases cited), we must adopt the construction of the 1951 statute indicated by City of Monterey v. Jacks, supra, 139 Cal. 542, 555-556, and we hold that the partial revocation of the trust effected by that statute necessarily results in a reversion to the state of the monies thus released from the trust, and the city holds those funds upon a resulting trust for the state. It is, therefore, unnecessary to consider plaintiffs’ other constitutional objections to the construction of the statute urged by defendants.
It remains only to consider the intervening plaintiff‘s contention that the provision in the 1951 statute, “[t]hat all of the revenue heretofore derived, or to be derived, by said city from ‘dry gas,’ obtained from said lands is hereby declared to be free from the public trust. . . .” [italics added], is an unconstitutional attempt to validate the past unlawful expenditure of such funds for general municipal purposes. (
The judgment is reversed.
Gibson, C. J., Edmonds, J., and Carter, J., concurred.
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, and City of Long Beach v. Marshall, 11 Cal.2d 609, nor with the implications of the more recent decision of this court in City of Long Beach v. Morse, 31 Cal.2d 254. These and other authorities will be hereinafter discussеd, 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
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, and Boone v. Kingsbury, 206 Cal. 148.) 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, 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, 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
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 was 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.)
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 еntire subject, it quotes approvingly on page 180 from Shively v. Bowlby, 152 U.S. 1, 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.
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, and in People v. California Fish Co., 166 Cal. 576, 597. 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. Kingsbury, 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; City of Long Beach v. Marshall, supra, 11 Cal.2d 609; Miller v. Stockburger, 12 Cal.2d 440; City of Long Beach v. Morse, supra, 31 Cal.
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 thе 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 Rest. 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 tо 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-
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 сome 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 “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 casе, 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
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; Atwood v. Hammond, supra, 4 Cal.2d 31, 38-43; City of Newport Beach v. Fager, 39 Cal.App.2d 23, 29; 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:
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 оf 1951 was not a “revocation” of any trust in any true sense of the word. The state was
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
In my opinion, the judgment of the trial court should be affirmed.
Schauer, J., concurred.
SHENK, J.—I concur in the dissenting opinion of Mr. Justice Spence and deem it unanswerable. A further word seems desirable from my standpoint.
When Boone v. Kingsbury was decided by this court in 1928 [206 Cal. 148] I expressed the view as the sole dissenter that permits proposed to be issued by the state for exploration and production of oil and gas from tidelands of the state would be inconsistent with the trust under which the state held those lands, namely, for commerce, navigation and fisheries. That case involved tidelands of the state outside of any municipality. It was there decided by the majority that the state owns those lands in fee subject only to the limited trust and that the granting of permits there sought to be issued by the state on a royalty basis for the production of oil and gas would not be inconsistent with the trust. The holding in that case has been the law of the state without deviation since that time. It has also been the law of the state that in granting to municipalities the tidelands within their borders the state conveyed the fee subject only to the same trust under which the state owned them. If leasing directly by the state for oil and gas production is not inconsistent with the trust the same rule should apply to a municipality occupying the same position as its grantor, the state. The case of City of Long Beach v. Morse, 31 Cal.2d 254, specifically left the way open for further legislation on the subject. Thаt legislation was supplied by the Act of 1951 (Stats. 1951, p. 2443). By that enactment there is a legislative finding that the use of the proceeds from oil and gas production by the city of Long Beach is not in any way affected by the terms of the trust. If the city of Long Beach is bound by the terms of the trust, as the majority holds, the state likewise is bound by the same trust. The only logical deduction to be drawn from the majority opinion is that the trust relationship now de-
Following the case of United States v. California in 1947 (332 U.S. 19) the United States granted to the several states bordering tidelands and to their grantees the right, title and interest of the federal government in and to such tidelands (Public Law No. 31, 67 Stats. p. 29, approved May 22, 1953). By that enactment the government reserved from the grant the right to exercise its constitutional powers over commerce and navigation and particularly stated in section 6 of the act that the reservation should “nоt be deemed to include, proprietary rights of ownership, or the rights of management, administration, leasing, use, and development of the lands and natural resources which are specially recognized, confirmed, established, and vested in and assigned to the respective States and others by section 3 of this Act.” If the title of the city of Long Beach is encumbered by the trust, as the majority holds, the title of the State of California is also subject to the trust, and falls within the reservations of the act of Congress. The only way to avoid this conclusion is to declare, as we should, that the proceeds from oil and gas development here involved fall within the proprietary classification of the property of the city of Long Beach in accordance with the statutory and decisional law of the state and as contemplated by the recent act of Congress.