SAN DIEGO COUNTY v. CALIFORNIA WATER TELEPHONE CO

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District Court of Appeal, Fourth District, California.

SAN DIEGO COUNTY v. CALIFORNIA WATER & TELEPHONE CO.

Civ. 3613.

Decided: August 29, 1946

Claude M. Rosenberg and Bacigalupi, Elkus & Salinger, all of San Francisco, and P. S. Thacher, of San Diego, for appellant. Thomas Whelan, Dist. Atty., Frank T. Dunn, Asst. Dist. Atty., and Carroll H. Smith, Chief Trial Deputy, all of San Diego, for respondent.

The plaintiff, County of San Diego, instituted this action against defendant, California Water and Telephone Company, a corporation, to enjoin the latter from flooding a certain county road because of the impounding of water in a reservoir to be formed by means of a dam which was under construction by defendants at the time this action was commenced. The case was submitted upon a stipulation as to the facts. Defendant, by way of affirmative defenses, alleged the existence of facts, which were conceded to be true in the stipulation, by which facts defendant contends that plaintiff was estopped to deny the right of defendant to flood the roadway involved, or to claim damages therefor. It is further contended that plaintiff has failed to do equity and that it therefore was not entitled to equitable relief. These contentions are urged upon the ground that defendant constructed the dam in reliance upon a continuous and consistent course of conduct by plaintiff over a period of years whereby plaintiff represented, agreed and led defendant to believe that the county would relocate the county road so as to obviate any possibility of the flooding thereof upon construction of the dam.

The admitted facts of the pleadings and the statement of facts show that for over 25 years the county maintained a public road from the city of El Cajon to the town of Descanso, which was designated as road F–8. Between these two places the road crosses the Sweetwater River and Peterson Creek. Plaintiff maintained, since 1910, a bridge called Sacatara Bridge, across the Sweetwater River, and also one across Peterson Creek, which is tributary to the Sweetwater River. The Peterson Bridge was washed out on several occasions. On October 19, 1931, the Board of Supervisors adopted a resolution reciting that the Sacatara Bridge was unsafe to carry the maximum load permitted vehicles under the California Vehicle Act, St.1923, p. 517, and that ‘if a proposed dam on the Sweetwater River south of said bridge is constructed, it will be necessary to change the location of said bridge, rendering it not advisable to rebuild or repair said bridge at this time * * *.’ On November 3, 1938, over seven years later, the then road commissioner of the county wrote a letter to defendant company stating that the county proposed ‘to make certain improvements on the road to Japatul’ (road F–8) which project included the construction of a new bridge across the Sweetwater River; that the county was seeking to acquire new rights of way along this road and was applying to the defendant for such right of way across its property. The letter further stated that the easement was requested as a ‘temporary right of way’ for the purpose of reducing the curvature along the portion of the then existing road east of the Peterson Bridge, and was to serve until such time as it became necessary to build a permanent line higher up to follow the high water contour of the proposed new dam on the Sweetwater River. A map was enclosed showing the temporary right of way sought and the ‘future permanent road’ proposed. On August 29, 1938, the county had appropriated funds with which to construct the bridge referred to in the letter of November 3, 1938. The requested easement (No. 1) was granted by defendant and was dated November 26, 1938. It contained the following recitations:

‘* * * for and in consideration of One ($1.00) Dollar * * * and * * * by reason of the location and establishment by the County * * * of a public highway upon, over and across said lands,’ defendant signified its approval and consent to the temporary location and construction of such highway thereon. It granted, and dedicated, subject to restrictions expressed, a temporary right of way 60 feet wide, containing 4.726 acres and the grantor waived all claim for any compensation or damages on account of the location and construction thereof. It then provided that said right of way and all interest of the county shall revert to the grantor (1) upon the County's completion of the permanent highway which shall replace the temporary highway; (2) in the event the county shall cease to use it for a period of six consecutive months; and (3) 90 days after the owner shall have delivered to the county written notice of said owner's intention to construct a dam on the Sweetwater River below the thereinafter described property, and the county by the acceptance of this easement, agree to the conditions of reversion and that the owner shall not be liable to the county for any claim of damages connected with the building of said dam. The above-mentioned temporary easement was accepted and ordered recorded by formal resolution on December 12, 1938. On April 20, 1939, the defendant company wrote the plaintiff stating: ‘With reference to the flow line elevation of the dam and reservoir proposed to be constructed at Sweetwater Falls at some future date, you are advised that two plans have had serious consideration’; that under one plan the spillway lip elevation would be 1355 feet and under the other it would be 1375 feet, but that in either case it would be reasonable to allow for a ten-foot flood crest, making the respective elevations 1365 feet and 1385 feet. It was stated further that inasmuch as ‘three is no definite information as to the time when construction of either of these will begin, * * * it is suggested that your department give consideration to constructing its highway and bridge over the river at approximately elevation 1400 * * *.’

On May 8, 1939, the defendant company, according to a request from the county, tendered to it a temporary easement (No. 2) of right of way (executed April 29, 1939) over its property on road survey No. 631, which was a new trial of way not covered by nor directly involved with road F–8. It contained similar provisions in reference to reversion and waiver of damages.

On June 22, 1939, the district attorney advised the plaintiff by letter that the original plan was to construct a bridge at an elevation of 1365 feet to provide for a contemplated dam to be built by defendant; that subsequently the company was notified that the bridge could not be built at the approximate elevation of 1400 feet and that the Road Commissioner was of the opinion that the cost at that elevation was prohibitive, and further that the easement should not be accepted in its present form due to certain provisions contained therein with reference to reversion and waiver of damages. By order of the Board of Supervisors the easement was refused and returned to the defendant with notice of such action.

On November 8, 1939, by resolution, the Board of Supervisors authorized the preparation of plans and specifications for the building of the Sacatara Bridge across the Sweetwater River on county road number F–8, upon the present alignment.

By resolution dated July 22, 1940, the plans for said bridge were approved, it being recited in the resolution that said plans ‘provide for the construction of a wood Howe Type truss bridge on concrete pier, the type of design having been decided upon because of the high salvage value of the superstructure in the event the Sweetwater Water Company elects to construct a dam in the vicinity of said crossing’. The construction of the bridge was started in July, 1940, and finished in 1941.

On January 5, 1942, plaintiff, by resolution, accepted from defendant company and recorded an easement (No. 3) dated 12/19/41, for a new westerly approach road to the Sacatara Bridge. It was 60 feet wide and followed the general line of road F–8 up to a point about 2400 feet west of the Sacatara Bridge. The new road over the easement conveyed by (No. 3) left road F–8 (which was a part of road survey No. 277 and also the approximate location of old survey No. 59) and was a relocation of a portion of road F–8, and ran over and upon road survey No. 631, which has been designated as ‘proposed relocation,’ for a distance of approximately 2,000 feet, and thence on an easterly course to the approach of the Sacatara Bridge. This easement was not designated as a temporary easement but contained a provision that the right of way was granted subject to reversion to grantor in event the grantee ‘shall at any time for a period of six months fail or cease to use any of the rights herein granted, conveyed and/or dedicated in respect to the herein-described lands or any portion thereof, or in event that grantor should at any time construct, enlarge or raise a dam which would result in the flooding at any time of the year of any portion of said right of way * * *’ and gratee will have no further right or interest therein or in or to said lands or any portion thereof ‘or any claim for damages for the flooding of said lands or any portion thereof or for any other reason.’

On June 18, 1943, defendant wrote plaintiff requesting that a certain road be lowered and widened ‘so that equipment to be used in connection with the proposed construction of a dam * * * may be moved over it.’ On June 25, 1943, defendant wrote plaintiff thanking it for the promptness in starting the work.

On September 29, 1943, defendant wrote plaintiff advising it that the company had started the construction of a dam and that it may result in flooding of a portion of the right of way granted under Easement No. 1, and that the easement provided that in the event of flooding, all rights therein granted plaintiff would revert to the grantor, and that ‘We will be glad to cooperate in any way that we may in the granting of a new easement, that will not be flooded by the construction of our dam.’

On October 6, 1943, that letter was referred to the county counsel. On February 14, 1944, the Board met and a letter from the County Surveyor informed the Board that a field survey showed that the county road F–8 and the bridge built at Sacatara crossing would be flooded by the water to be impounded in the reservoir.

On September 6, 1944, a conference was held by agents of plaintiff and defendant. It was shown that defendant had already expended over $800,000 toward the construction of the dam, and the company offered to grant to the county, without charge, an easement for the permanent road as proposed and surveyed by plaintiff, which was a proposed relocation of the old road F–8 at a higher level (road survey No. 631) which involves a distance of about 1500 feet. Plaintiff refused to accept the offer and contended that it held the easements free of any of the conditions of reversion or waiver of damage clauses, and instituted this equitable proceeding to have it so decreed. After trial and upon these agreed facts the trial court found that upon the completion of the dam a revervoir will be fomred and the water will ‘back up, overflow and submerge a portion of said highway F–8, and will overflow and submerge the Sacatara and Peterson bridges, and will * * * destroy the property of the plaintiff, to wit, a portion of said highway and the said two bridges without compensation unless * * * restrained by this court from so doing’; that the Board of Supervisors accepted easement (No. 1) for the purpose of realigning a portion of road F–8 as described therein; that the easement contained certain forfeiture, reverter and waiver of damage clauses, but that said clauses are not ‘binding or obligatory upon the plaintiff county’; that the Board of Supervisors was not authorized by law to accept or to consent to said forfeiture, reverter and waiver of damage clauses and that said clauses are of no force and effect; that said clauses constituted an attempt by the Board to abandon the county highway by contract, to surrender a county dominion and control over its streets and highways, and to make a gift of county property, not authorized by law; that defendant has not been misled to its prejudice or injury by any act, conduct or declaration of plaintiff relating to the construction of said dam.

The court then found that on December 19, 1941, defendant executed and delivered easement No. 3, and that the Board of Supervisors accepted it on January 5, 1942, for the purpose of relocating a portion of road F–8, and that said easement contained practically the same forfeiture, reverter and waiver of damage clauses as easement No. 1 above set forth, and that said clauses were not binding or obligatory upon the county for the same reasons heretofore mentioned.

Based upon these findings the court concluded that the acceptance by and consent of the Board of Supervisors to the aforesaid clauses mentioned in the easements constituted ultra vires acts on the part of the Board; that the County was not estopped to deny the validity of the clauses and not estopped to assert its rights in and to said highway and said bridges; that the flooding of plaintiff's highway and bridges by defendant will constitute a taking and damaging of plaintiff's property in violation of Article I, sec. 14 of the Constitutiona of California, and that plaintiff is entitled to a permanent injunction forever restraining and enjoining defendant from taking, flooding or destroying or interfering in any way with County road F–8 or any portion thereof ‘or the Sacatara or Peterson bridges situated thereon, without first making just and adequate compensation to the plaintiff therefor.’ Judgment was entered accordingly.

Since the facts upon which the findings are based are not in dispute, the finding of the court on the subject that the acts of the Board of Supervisors in connection with the easements are ultra vires, void and unenforceable, and that no estoppel arises from the facts stated, becomes a pure conclusion of law. San Diego Trust & Savings Bank v. County of San Diego, 16 Cal.2d 142, 105 P.2d 94, 133 A.L.R. 416.

It is conceded by the plaintiff in its brief that if the forfeiture, reverter and waiver of damage clauses are valid and binding on the county ‘then there is an end to the litigation’ but on the other hand, it is contended that if the clauses are null and void, then no estoppel can ever arise against the county.

Easement No. 1 was but a ‘temporary location’ of a 60-foot ‘temporary right of way’ and it was thoroughly understood by all of the parties, at the time, that it was but a temporary easement. A part of the consideration for this temporary easement was the agreement of the county to locate and establish a new public highway upon defendant's lands at a higher level. The easement was merely for the purpose of ‘reducing the curvature along the portion of the then existing road.’ From the facts recited there apparently has been a relocation of a portion of highway F–8, included within the grant of easement, and an alteration of the existing road. Under such circumstances an implication is raised that there was a discontinuance of those portions of the highway which did not come within the newly assigned limits, and that those portions had been abandoned. 13 Cal.Jur. 334, sec. 26; sec. 960.1, Streets and Highways Code; People v. Goodin, 136 Cal. 455, 69 P. 85.

The Peterson Bridge was erected on the north end of this easement (No. 1). The defendant granted the easement in good faith relying upon the plaintiff's agreement to relocate the road at a higher level. The temporary easement contained reversionary clauses that (1) it should revert to defendant when the County completed the permanent highway; (2) when the County ceased using it for six months; and (3) 90 days after defendant notified plaintiff that it intended constructing the dam. Notice was given under provision No. (3) and plaintiff refused to concede that the easement conveyed reverted. No moral reason appears why the temporary grant of the easement (No. 1), with the conditions of reversion so specified, should not be binding upon plaintiff, and a reversion effected for failure of plaintiff to perform after it had, by resolution, duly accepted the easement and caused it to be recorded, with full knowledge of the conditions and reversionary clauses. Under equitable principles, plaintiff should not now be allowed to retain said easement and recover damages for flooding the land granted thereunder without complying with its agreement to locate and establish a permanent road higher up.

This same argument applies to Easement No. 3. It was a complete relocation of a portion of road F–8. Although it was not designated as a temporary easement, it was given and accepted by the County with practically the same reversionary clauses.

Under section 960.1 of the Streets and Highways Code, supra, the Board of Supervisors may summarily vacate and abandon any portion of a county highway, which portion has been superseded by relocation. The implication arises here that that portion of road F–8 which was relocated by easement No. 3 was abandoned. The County had the right and authority to so accept this new easement which was a relocation of the existing road F–8, and the right and authority to summarily abandon the portion superseded by the relocation. This did not constitute an ultra vires act, notwithstanding the finding of the trial court. The Board also had the authority to accept the two easements, which were temporary in character, the main consideration for which was the completion of the ‘future permanent road.’ Equity will not allow the plaintiff to retain the easements free from the forfeiture and waiver of damage clauses, and by this action in equity enjoin the defendant from flooding the easements given. It should therefore not be held that the company must now pay plaintiff compensation for the resulting damage from the flooding of the land granted under such easements. It is a general rule that estoppel cannot operate against positive law, public policy or in aid of a contract which is expressly prohibited by constitutional or statutory provisions. 39 C.J.S., Highways, § 113, p. 1047, and cases cited; 7 Cal.Jur. p. 512, sec. 86; 18 Cal.Jur. p. 799, sec. 105.

Plaintiff relies mainly upon such cases as Wills v. Los Angeles, 209 Cal. 448, 287 P. 962, 69 A.L.R. 1044, which was a case where a strip of land was conveyed to the City for street purposes. A condition in the deed provided for the forfeiture of title in the event the same should be used for street railway purposes. It was held that such condition was repugnant to the grant and therefore void, leaving the grant in full and unrestricted operation.

The converse of this doctrine is that a municipality orother governmental agency may be estopped as right and justice may require, where the act or contract relied on to create the estoppel was within its corporate powers, although the method of exercising the power was irregular or unauthorized. 31 C.J.S., Estoppel, § 144, p. 428, Note 78; Miller v. McKinnon, 20 Cal.2d 83, 91, 124 P.2d 34, 140 A.L.R. 570; Greene County v. Tennessee Eastern Electric Co., 6 Cir., 40 F.2d 184; 7 Cal.Jur., p. 515, sec. 88.

Defendant does not question the principles of law or the authorities cited by plaintiff, because the County had the unquestioned right to relocate the existing road in the manner contemplated by it and, under the circumstances, if a county purports to bind itself, either by contract or by conduct, to do something within its general powers and a third party acts thereon to its prejudice, with full knowledge on the part of the county, the latter may be estopped to question the binding effect of its commitments or conduct or to object to the acts done by the third party in reasonable reliance thereon.

The County may not have been in a position to have been legally forced to proceed in accordance with its declared intention before defendant altered its position by commencing the construction of the dam. In view of the silence of the County for approximately one year after it knew that the work on the dam had actually commenced and during which period defendant expended over $800,000 toward such construction, and since plaintiff actively participated in expediting the project, it must have known that defendant was relying on the agreement of the County and the terms of the reversionary and waiver of damage clauses in the easement. It surely cannot be held under these circumstances, that the company was not misled to its injury and prejudice. It further appears that the County would be greatly benefited by the building of the dam. Vast areas, now barren, might be put under cultivation; the assessment roll of the County would be greatly increased by the project; and public need for water in that area greatly outweighs the public need for the particular road here involved. The County can be and should be estopped, in this equitable proceeding, from claiming permanent ownership rights in and to the easements conveyed, free from any condition, and it should not be authorized by the decree to recover damages, in view of the course of conduct of both parties and the waiver of damage clauses agreed upon.

The case of Times-Mirror Company v. Superior Court, 3 Cal.2d 309, 44 P.2d 547, seems particularly appropriate to the facts in the instant case, which bear on the question of estoppel. That proceeding was instituted to require the Superior Court to proceed to trial with the condemnation proceedings which had been instituted by the City of Los Angeles to acquire valuable real estate owned by petitioner. The original case was tried and reversed on appeal. Thereafter the City filed a notice of abandonment of the proceedings to condemn plaintiff's building and fixtures. Relying upon the disclosed intention of the City to condemn its building, petitioner erected a new one at great cost and equipped it with new machinery. It contended that the City was estopped to abandon the condemnation proceedings and the Supreme Court so held. After citing City of Los Angeles v. Cohn, 101 Cal. 373, 35 P. 1002, it stated that the petitioner was justified in concluding that the City would complete its announced plans to condemn the old building and therefore it was bound by the rules of equity to prosecute the condemnation cause to final judgment.

Another case closely analogous to the instant one in principle is McGee v. City of Los Angeles, 6 Cal.2d 390, 57 P.2d 925, in which case it was stated that the facts constituted one of those exceptional situations recognized in the cases of Times Mirror Co. v. Superior Court, supra, and City of Los Angeles v. Cohn, supra, where right and justice require the invocation of the principle of estoppel in pais in favor of a citizen or private party and against a municipality. See, also, City of Los Angeles v. County of Los Angeles, 9 Cal.2d 624, 72 P.2d 138, 113 A.L.R. 370; and Pedro v. Humboldt County, 217 Cal. 493, 19 P.2d 776, 777. In the latter case plaintiff granted the County a deed to a strip of land for highway purposes. The deed, which the County accepted, provided that the County should maintain a certain ditch and construct a road from a cow barn to a field in the upper end of plaintiff's property. In holding that the County was bound to perform in accordance with the terms of the deed, the court said:

‘Furthermore, it has been held that counties may not accept and retain the benefit of such conveyances and thereafter repudiate the reasonable burdens undertaken by them as a part of the consideration therefor (Hill v. City of Oxnard, 46 Cal.App. 624, 189 P. 825), and no good reason is suggested why that principle should not be applied in the present case.’

By application of the same theory, the plaintiff in the instant action is estopped to repudiate the burdens of the forfeiture, reverter and waiver of damage clauses, due mainly to the fact that it still retains and asserts full rights to the benefits of the easements granted by defendant. Tonini v. Ericcsen, 218 Cal. 43, 21 P.2d 566; Secs. 1589 and 3521, Civ.Code.

A court of equity acts only when and as conscience commands and if the conduct of the plaintiff be offensive to the dictates of natural justice then, whatever may be the rights he possesses, and whatever use he may make of them in a court of law, he will be held remediless in a court of equity. Keystone Driller Co. v. General Excavator Company, 290 U.S. 240, 54 S.Ct. 146, 78 L.Ed. 293; Long v. Newman, 10 Cal.App. 430, 435, 102 P. 534; Bigelow v. City of Los Angeles, 85 Cal. 614, 24 P. 778; 14 Cal.Jur. p. 175, sec. 3.

This sufficiently disposes of the issues presented by this equitable proceeding.

Judgment reversed.

GRIFFITH, Justice.

BARNARD, P. J., concurs.