CITY OF OAKLAND v. Herman Stelzner and Walter R. McCoy, Defendants and Respondents.

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District Court of Appeal, First District, Division 2, California.

CITY OF OAKLAND, a municipal corporation, acting by and through its Board of Port Commissioners, Plaintiff and Appellant, v. Frank A. BURNS, Norman C. Thomson et al., Defendants, Herman Stelzner and Walter R. McCoy, Defendants and Respondents.

Civ. 16456.

Decided: October 31, 1955

J. Kerwin Rooney, Port Atty., Edward A. Goggin, Asst. Port Atty., Oakland, for appellant. Rodney H. Hamblin, Donovan, Stuhr & Martin, San Francisco, for respondent Herman Stelzner. Herbert Bartholomew, San Francisco, for respondent Walter R. McCoy.

This is an appeal by the City of Oakland (hereinafter called the City), from a judgment in favor of defendants Stelzner and McCoy in an action for an injunction and damages instituted by the City in relation to the operation by defendants of limousine or bus services from and on the Oakland Municipal Airport (hereinafter called the Airport), and their solicitation on the Airport of patronage for said services, allegedly in contravention of certain ordinances and regulations of the City and its Board of Port Commissioners (hereinafter called the Board), and of the exclusive license and concession granted by the Board for said services at the Airport to Fialer's Limousines, Inc. (hereinafter called Fialer's).   A preliminary injunction which had been granted was vacated.

The court's findings of fact and conclusions of law are in part to the following general effect.

The City of Oakland owns the Airport, and it operates it through the Board in its proprietary capacity.   Earhart Road is the principal roadway within the Airport passing the main buildings among which are the International Terminal Building, hangars and installations, and has been paved and provided with curbings by the Board.   Since 1927 the main part of this road, specifically described in the findings, has been used generally by the public with the knowledge and without objection from the Board, which at no time took any action to terminate such general use.   The Board has in that manner dedicated it to the public use under the common-law doctrine of dedication by implication and it is now a public street.   It has not been dedicated in any formal manner.   An unnamed side road of Earhart Road along the southwesterly side of the International Terminal Building and a parking and turning area in back of said building, together by the court called Area B and delineated on a map, has been used since 1947 for ground transportation service for passengers of nonscheduled airlines and the vehicles transporting these passengers for hire had access to that Area B only by revocable permits of the Board and its agents.   This Area B has not been dedicated to public use either formally or by implication.

The agreement between the City in its proprietary capacity and Fialer's, granting the latter an exclusive license for certain transportation services for hire commencing November 1, 1951, is valid except insofar as it purports to accord Fialer's exclusive rights with respect to the part of Earhart Road found to be a public street.   The following ordinances allegedly violated by defendants were found to be valid ordinances regulating the use of airport property held by the City in its proprietary capacity but not applicable to the public part of Earhart Road:

Port Ordinance No. 641 of January 10, 1949 among other things prohibiting the use of the Airport as a base for the carrying for hire of passengers or for any other commercial purpose without license from the Board or its Port Manager.

Port Ordinance No. 786, of September 24, 1951, prohibiting solicitation of patronage for any taxicab, limousine or airline bus service within the Airport or entering the Airport for such purpose, except when so authorized by contract.

Port Ordinance No. 835 of November 3, 1952 adding to Port Ordinance No. 812, Section 2.1 prohibiting the operation of any vehicle or bus from the Airport unless with the approval of the Board and on its condition and terms.

Section 106 of Council Ordinance No. 3083 C.M.S. of May 31, 1949 prohibiting the operation or leaving of a vehicle on private property without the express permission of the owner.

Since November 1, 1951 nobody but Fialer's has been entitled to solicit patronage for or to engage in the transportation of persons on or from the Airport in airline motor buses, taxicabs or limousines except that defendants may operate on the portion of Earhart Road found to be a public street.

Defendant Stelzner provided transportation with one limousine from March 21, 1946 to January 8, 1953, defendant McCoy with one bus from some time in 1947 to January 1953.   Prior to November 1, 1951 defendants used Area B in operating their vehicles.   On that date their permits were revoked and thereafter they used the portion of Earhart Road found to be a public street only.   Both defendants are duly licensed by the City to operate a limousine carrying passengers for hire on the public streets of the City, which include the public portion of Earhart Road.

On January 23, 1951 defendant McCoy was granted by the Public Utilities Commission a certificate of public convenience and necessity authorizing him to operate a passenger stage service for the transportation of nonscheduled airline passengers from the Airport to certain points in Oakland and San Francisco and to Treasure Island over the most appropriate streets between the points authorized.   On rehearing a petition of Fialer's to vacate said order was denied and the order affirmed.   Said certificate is unambiguous and authorizes defendant McCoy to use the most appropriate public streets and highways between the points authorized including the part of Earhart Road found to be a public street.   Defendant McCoy is under a duty to provide a ground transportation service in accordance with the certificate obtained.

Within a year prior to the commencement of the action defendants have not committed any of the acts prohibited in the ordinances mentioned herein except on the portion of Earhart Road which is a public street.   They have within that period not violated said ordinances, not interfered with the exclusive contract between the City and Fialer's or with the City's duty to provide adequate ground transportation at the Airport, not trespassed upon property in the Airport held by the City in its proprietary capacity and not created any nuisance there after November 1, 1951.

Appellant's primary contention is that no part of Earhart Road is a public street but that in its entirety it is a private road within the Airport.   The City has all power over it which the Court conceded to it with respect to the Airport property held in the City's proprietary capacity.   The defendants have not cross-appealed and do not attack any of the findings or conclusions of law.   They do not claim more extensive rights than those recognized in the judgment, to wit the right to operate their limousine or bus services on such portion of the airfield as is a public street.   Whether the part of Earhart Road involved has or has not become a public street is therefore the crucial question.

Appellant urges both that the evidence does not support the finding that the Board by implication dedicated Earhart Road to be a public street and that the Board lacked power so to dedicate it.   Whether there has been a common law dedication is a question of fact (15 Cal.Jur.2d 387) and the general rule that the decision of the trial court based on substantial though conflicting evidence is binding on appeal applies.  Diamond Match Co. v. Savercool, 218 Cal. 665, 667, 24 P.2d 783.   In this case it may well be that from the absence of all restriction on the use by the public of Earhart Road, including operation of scheduled Key System buses over it, pursuant to a certificate of public convenience and necessity of the Public Utilities Commission and from the lack of any reservation of private right by the Board an inference of an intent to dedicate as a public street could reasonably be drawn, notwithstanding the fact that the purpose for which the City uses the Airport property, to wit as a terminal for extensive air transportation together with numerous connected installations and enterprises, requires the daily use of its main roadway by thousands of persons who come as licensees or invitees of the City and whose presence for the purposes of the Airport itself cannot be considered evidence of an intention or offer to dedicate it as a public street.   However, we need not decide this point because we have concluded that the Board lacked power to dedicate Earhart Road in the manner found, by acquiescence in public use, without following the formal proceeding for opening of public streets provided for by section 218 of the Oakland City Charter to be stated hereafter.

A common law dedication as a public street or highway by an informal implied offer by the owner informally accepted by the public through user is in general recognized in California and both offer and acceptance may be proved by circumstantial evidence.   The function of the user by the public and the acquiescence therein by the owner in showing an offer of dedication as a public street or highway was recently analyzed in Union Transp. Co. v. Sacramento County, 42 Cal.2d 235, 240 et seq., 267 P.2d 10, and was there found to be twofold:  (a) an actual intent and offer to dedicate may be inferred from the owner's long acquiescence in a public use of the property under circumstances which negative the idea that the use was under a license, (b) a long continued adverse use may establish against the owner a conclusive presumption of dedication.   This latter effect of the user is in the character of prescription and the intent and offer of dedication may be constructive only.

For the actual offer of dedication referred to in (a) an offeror legally entitled to make the dedication is required.   See Neil v. City of Glendale, 106 Cal.App. 553, 557, 289 P. 877;  whether the same capacity or authority is required with respect to the constructive dedication mentioned subd. (b) is more doubtful.   See Schwerdtle v. County of Placer, 108 Cal. 589, 593, 41 P. 448;  Gray v. Magee, 133 Cal.App. 653, 662, 24 P.2d 948.

A municipal corporation, unless specially restricted, may as well make an actual offer of dedication of land owned by it as a private owner, 19 Cal.Jur. 23 et seq., § 384;  10 McQuillin Municipal Corporations, p. 104;  11 McQuillin, supra, p. 616;  City of Oakland v. Oakland Water Front Co., 162 Cal. 675, 680, 124 P. 251, and the manner in which such offer can be made will be the same in both cases (16 Am.Jur. 356, § 13), except insofar as for a municipal corporation the mode is restricted by law, Constitution or charter.   In 10 McQuillin, supra, p. 106 et seq., it is stated in general:  “The legislature may prescribe the method by which the power to sell or lease or otherwise dispose of property shall be exercised, and, if applicable, the method so provided must be substantially followed.   In like manner, compliance should be had with an applicable method of sale, lease or other disposition or [sic] property prescribed by a charter, or ordinance.”   The same rule is stated with respect to the vacating of public roads in County of San Diego v. California Water & Telephone Co., 30 Cal.2d 817, 823, 186 P.2d 124, 175 A.L.R. 747, where also an analogous rule as to contracts for the sale of municipal property is mentioned.   In Miller v. McKinnon, 20 Cal.2d 83, 88, 124 P.2d 34, 37, 140 A.L.R. 570, the following general rule is quoted from Los Angeles Dredging Co. v. City of Long Beach, 210 Cal. 348, 353, 291 P. 839, 842, 71 A.L.R. 161:  “ ‘It is * * * settled that the mode of contracting as prescribed by the municipal charter, is the measure of the power to contract;  and a contract made in disregard of the prescribed mode is unenforceable.’ ”   We hold that the same principle applies to voluntary dedication of municipal property to be a public street.

In our case an exclusive mode of opening public streets in the Port Area is prescribed in section 218 of the Oakland City Charter, supra, which reads:

“Sec. 218.   Whenever the Board shall determine that it is necessary to open, close, improve, alter or vacate a public street, or part of a public street within the ‘Port Area,’ a certified copy of the resolution so determining such necessity shall be filed by the Board in the office of the City Clerk, whereupon the City Manager and the City Council shall initiate and carry to completion the proceedings necessary to effect said proposal.”

The word “whenever” in this section indicates that the mode prescribed is exclusive, the repeated use of the word “shall” in describing the procedure, that it is mandatory.   Section 217 moreover prevents the City of Oakland or the Council from performing any of these acts mentioned in section 218 without the cooperation of the Board, a provision of less importance in this case as dedication by the Board was found.   It is undisputed and found at least by implication that Earhart Road has not been opened as a public street in the manner prescribed by section 218, supra.   Even if the Board should have had the intention and had made the implied offer to dedicate Earhart Road as a public street without substantially following the procedure of section 218, such offer would have been invalid and ineffective.

It could be argued that the creation of an easement of public street by adverse user by the public as mentioned above subd. (b) without an actual intent or offer to dedicate by the City or any of its agents is not the opening of a public street by the Board or the City, but an adverse imposing of such burden to which section 218, supra, does not apply.   However, such creation would be one by prescription, and no title by prescription can be acquired against any municipal corporation or subdivision of the State, at least not in land reserved for or devoted to some specific public use.  (2 Cal.Jur.2d 507, § 10).   In Henry Cowell Lime & Cement Co. v. State, 18 Cal.2d 169, 172, 114 P.2d 331, 332, the Supreme Court quotes from Richert v. City of San Diego, 109 Cal.App. 548, 553–554, 293 P. 673, 676, as follows:  “ ‘Where land held by the state or any of its subdivisions has been actually reserved for or dedicated to some specific public use, there can be no adverse holding thereof which can give title to the adverse claimant.’ ”   In Bartholomew v. Staheli, 86 Cal.App.2d 844, 857, 195 P.2d 824, 832, it is stated quoting from People ex rel. State Board of Harbor Com'rs v. Kerber, 152 Cal. 731, 93 P. 878;

“ ‘ * * * “It is immaterial where the title—that is, the record title—is held, whether by the state at large, or by a county, or by some municipal department or other official body.   There can be no adverse holding of such land which will deprive the public of the right thereto, or give title to the adverse claimant, or create a title by virtue of the statute of limitations.   The rule is universal in its application to all property set apart or reserved for public use, and the public use for which it is appropriated is immaterial.   The same principles which govern the adverse holding of a street, a public square, a quay, a wharf, a common, apply to the adverse holding of a schoolhouse.   The public is not to lose its rights through the negligence of its agents, nor because it has not chosen to resist an encroachment by one of its own number, whose duty it was, as much as that of every other citizen, to protect the state in its rights.”   This rule has been often repeated in the opinions of this court.  (Citing numerous California authorities.)’ ”  (Italics added by District Court of Appeal).

The rule was applied to the acquisition of an easement by prescription in Reclamation Dist. No. 833 v. American Farms Co., 209 Cal. 74, 81, 285 P. 688.   With respect to public and municipal corporations the rule is contained in section 1007 of the Civil Code without even the restriction to land devoted to a public use.  (2 Cal.Jur.2d 512, § 14.)   However, the use as an airport, here involved, is at any rate a public use which excludes the acquisition of rights by prescription also independent of section 1007, supra.   The right of local public agencies to acquire and use property for airports, the right to levy taxes to raise funds for that purpose and the powers of the agency in connection with airports are regulated in section 50470—'74 of the Government Code.  Section 1238 of the Code of Civil Procedure mentions, subd. 20, Airports as one of the “public uses” for which the right of eminent domain may be exercised.

The above principle is mainly applied to prevent the acquisition by prescription of private rights of specific persons in property devoted to a public use, but we are of opinion that it applies also to the acquisition of an easement of public street.   The public as a whole place the control over lands devoted to a public use in the hands of certain agents (in this case the Board and the Council);  those who use a roadway over such public lands are only a small segment of the general public.   Such small segment should not have the power to assume control and give part of the property a use that may be injurious to the one to which the land was originally devoted and which was expressly entrusted to certain chosen or appointed agents, even if these agents were remiss in protecting said trust.   Compare for a somewhat similar reasoning Union Transp. Co. v. Sacramento County, supra, 42 Cal.2d at page 244, 267 P.2d 10.

Respondents contend that the City cannot rely on the above rules of public law in contesting their right to use Earhart Road as a public street because it defends its right to make the exclusive contract with Fialer's on the ground that it operates the Airport in proprietary and not in governmental capacity.   We do not agree.   The principle on which the City claims a right to make an exclusive transportation contract at the Airport is stated as follows in Ex parte Houston, Okl.Cr.App., 224 P.2d 281, 292.  “To us it appears reasonable that the power to acquire and operate a proprietary function implies all necessary power to operate it efficiently.   This thought was advanced in the Florida case of Miami Beach Airline Service v. Crandon, 159 Fla. 504, 32 So.2d 153, 155, 172 A.L.R. 1425, 1430.   And there the court said:  ‘When a governmental entity is authorized to exercise a power purely proprietary, the law leans to the theory that it has full power to perform it in the same efficient manner as a private person would do.’ ”   In the latter case this principle was used to uphold an exclusive contract of the same kind as that of Fialer's.   It was evidently followed by the trial court in this case and is not attacked by respondents.   It does not, however, follow from the recognition of the principle that a municipality acting in proprietary capacity must be allowed the powers necessary to perform it efficiently and to be free from restrictions which impede its efficiency that it must also be free from restricting provisions which do not impede its specific function, like the one restricting the manner in which it may open public streets over its lands or that it cannot rely on rules advantageous to it like the one protecting it against the acquisition of prescriptive rights by third parties.   Section 218 of the Oakland Municipal Charter does not contain any restrictions indicating that it does not apply to opening of streets over lands devoted to a public use of proprietary character, and the rule excluding acquisition of prescriptive rights against municipalities at most excepts lands not devoted to any public use, either governmental or proprietary in character.

Our conclusion that Earhart Road on the above grounds has not become a public street is decisive of the appeal.   The certificate of public convenience and necessity of respondent McCoy orders him to conduct his operations “over and along the most appropriate public streets and highways between the points authorized.”   Respondent McCoy urges the superior jurisdiction of the Public Utility Commission over the bus and limousine services on Earhart Road (Section 23, Art. XII of the California Constitution;  Section 1033 of the Public Utilities Code) on the basis only that Earhart Road is a public street.   The order does not contain any finding that Earhart Road is a public street, or any decision that the authorized service “from the Municipal Airport” must take place over Earhart Road.   It is not contended that the Public Utilities Commission has any power of regulation over private roads and no constitutional or code provision gives it such power.   Compare Kuhn v. Ferry and Hensler, 91 Cal.App.2d 805, 809–810, 206 P.2d 1.

Our holding that Earhart Road has not been shown to be a public street requires reversal of the judgment appealed from but does not necessitate a new trial.

The judgment is reversed with directions to amend the findings of fact, conclusions of law and judgment in accordance with the opinion herein expressed.

NOURSE, Presiding Justice.

DOOLING and KAUFMAN, JJ., concur.