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District Court of Appeal, Fourth District, California.


Civ. 4212.

Decided: January 08, 1951

Fred N. Howser, Atty. Gen., and Walter S. Rountree and Dan Kaufmann, Deputies Atty. Gen., for appellant and cross-respondent. Solon S. Kipp and W. E. Starke, San Diego, for respondent and cross-appellant.

Action to quiet title.

Both parties appeal from a judgment quieting title in plaintiff to a section of land in the Anza desert region in San Diego county. Plaintiff's appeal is directed to that part of the judgment which quieted title in plaintiff, conditioned upon reimbursement to defendant of amounts paid by him for the purchase of said property under tax deed, and the taxes paid thereon by him from the date of his deed to judgment.

The property involved was conveyed by Louis T. Busch and Lorraine Busch to the State of California by deed, dated November 17, 1932, acknowledged May 19, 1933 and accepted by the State Park Commission by resolution dated April 11, 1933. The deed and resolution were recorded June 6, 1933. At the time the State acquired title there were unpaid property taxes on the land in question for the year 1933. In 1934 the county of San Diego instituted proceedings to collect the 1933 delinquent state and county taxes, and pursuant to such proceedings, the property was ‘sold’ to the state on June 28, 1934, and was ‘deeded’ to the state July 1, 1939. On March 11, 1940, the section involved was ‘sold’ by tax deed from the State to the defendant, Lovell C. Chambers, and all annual property tax assessments thereon from March, 1940, through 1948 have been paid by him.

The trial court concluded that since April 11, 1933, title to the property involved was vested in the State in its sovereign capacity and from that date forward was held in trust for the people of the State; that the lien for taxes existing at the time of acquisition by the State was merged in the State's title and was extinguished; that the property could not thereafter be lawfully subjected to property taxes and that the delinquent tax proceedings instituted by the county and the tax deed pursuant thereto were void. The trial court pronounced judgment quieting title of the State to the property, but conditioned its decree upon the reimbursement to the defendant of the amounts paid by him for the purchase of the property under tax deed and the taxes paid by him from the date of the tax deed to the date of the judgment.

The defendant Chambers, relying on his tax deed and appealing from the whole of the judgment, contends (1) That the complaint does not state facts sufficient to constitute a cause of action; and (2) That the action is barred by the statute of limitations.

Defendant argues that since the State acquired title to the property involved in 1933 and the complaint was filed on May 28, 1947, the action is barred by the provisions of sections 315 and 345 of the Code of Civil Procedure.

Section 315 provides:

‘When the people will not sue. The people of this state will not sue any person for or in respect to any real property, or the issues or profits thereof, by reason of the right or title of the people to the same, unless——

‘1. Such right or title shall have accrued within ten years before any action or other proceeding for the same is commenced; or,

‘2. The people, or those from whom they claim, shall have received the rents and profits of such real property, or some part thereof, within the space of ten years.’

In People v. Banning Co., 167 Cal. 643, 646, 140 P. 587, the court, in commenting upon said section, held that the words ‘right or title’ in the first subdivision must of necessity refer to the right or title of the State to sue, not to the right or title upon which the state bases its right to sue and that if this were not so, the state could not maintain an action in respect to land to which it held title for more than ten years prior to the beginning of the action, although the invasion of its right which created the cause of action had been very recent and within ten years.

In People v. Kings County Development Company, 177 Cal. 529, 171 P. 102, which was an action by the State to cancel a patent on the ground of fraud in its procurement and that the plaintiff be adjudged to be the owner of the lands free of any right of the claimant thereto, it was held that the action was not barred by the period of three years fixed by section 338 of the Code of Civil Procedure, but by a period of ten years fixed by section 315 of the same code and that such action was not barred until the expiration of ten years from the issuance of the patent attacked.

In the instant case, we conclude that the cause of action accrued when the defendant acquired and recorded a tax deed to the property in question on March 11, 1940, and that since the action was filed in 1947, it was filed within the ten-year requirement of section 315. Moreover, in the instant action it appears that the principal relief sought is to remove the cloud upon plaintiff's title created by defendant's recorded tax deed and to prevent the defendant from asserting any right, title or interest in and to the property adverse to the plaintiff.

As was said in Newport v. Hatton, 195 Cal. 132, 145–146, 231 P. 987, 991: ‘A claim of title, even of record, unaccompanied by adverse holding, will not start the statute. A party holding the paramount claim to a legal title is not called upon to take action against a hostile claim which is not of a nature to ripen into a valid adverse title. An outstanding adverse claim, which amounts only to a cloud upon a title, and which is not of such a nature as to give the adverse claimant a prescriptive title, is a continuing cause of action, and is not barred by lapse of time until the hostile claim is asserted in some manner to jeopardize a superior title.’

The record shows that the property with which we are here concerned is held in trust for the people of the state by the State Park Commission. It was acquired and accepted by the park commission for state park purposes. Under such circumstances, the doctrine of adverse possession is not applicable and section 315 is not a bar. There can be no adverse holding of such land by defendant which will deprive the public of the right thereto or give or create title in the defendant by virtue of the statute of limitations. People v. Kerber, 152 Cal. 731, 734, 93 P. 878.

As was said in Henry Cowell Lime & Gement Co. v. State, 18 Cal.2d 169, 172, 114 P.2d 331, 332: ‘The rule with respect to the acquisition of title by adverse possession as against a governmental agency is set forth in 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.’'

This rule is again stated in Fresno Irr. Dist. v. Smith, 58 Cal.App.2d 48, 59, 136 P.2d 382, and in People v. Banning Co., supra, 167 Cal. 649, 140 P. 590, where it is said: ‘The running of the statute of limitations does not depend upon the presumption of the existence of any grant. It operates upon the state, with respect to any property not dedicated or held for a public use, as soon as adverse possession thereof begins, without regard to the existence or presumed existence of a lawful grant. By the section cited an adverse occupancy for the period of limitation confers title to the property occupied, regardless of the possible existence of a previous grant. This, of course, applies, so far as the state is concerned, to proprietary land alone. It does not apply to property dedicated to public use.’

Section 345 of the Code of Civil Procedure provides in part as follows: ‘The limitations prescribed in this chapter apply to actions brought in the name of the State or county or for the benefit of the State or county, in the same manner as to actions by private parties'. This provision is found in Part 2, Title 2, Chapter 3 of the code and as is indicated by the heading of that chapter, section 345 and the preceding sections in said chapter relate to the time of commencing actions other than for the recovery of real property.

It is the general rule that the state and its agencies are not bound by general words limiting the rights and interests of its citizens unless such public authorities be included within the limitation expressly or by necessary implication. C. J. Kubach Co. v. McGuire, 199 Cal. 215, 217, 248 P. 676; In re Estate of Miller, 5 Cal.2d 588, 597, 55 P.2d 491; Berton v. All Persons, 176 Cal. 610, 617, 170 P. 151; Balthasar v. Pacific Elec. Ry. Co., 187 Cal. 302, 305, 202 P. 37, 19 A.L.R. 452.

In Bolton v. Terra Bella Irr. Dist., 106 Cal.App. 313, 327, 289 P. 678, 684, the court said, quoting from People v. Doe G. 1,034, 36 Cal. 220, 222: “The Constitution and laws upon the subject of taxing property are therefore to be understood as referring to private property and persons, and not including public property of the state, or any subordinate part of the state government.”

We conclude that the code sections contained in Chapter 3, Title 2 of the Code of Civil Procedure are inapplicable to the instant case and that there is no necessary implication that the legislature intended to include therein the limitation on the right of the state to maintain the present action to remove the cloud upon its title.

In Smith v. City of Santa Monica, 162 Cal. 221, 121 P. 920, plaintiff sought to quiet title to certain lots in the city of Santa Monica. Plaintiff's ownership of the land involved rested upon tax deeds from the state. Two tracts of land were involved. The assessment under which one was sold was for the year 1895 and the other for the year 1894. The one was sold to the state in 1896 and the other in 1895. The controller's order to the tax collector to sell in both cases was on May 9, 1908, and the tax collector's deed in both instances was made on June 10, 1908. The city of Santa Monica had brought an action in 1895 to condemn these lands for public purposes as a city park. Judgment in the action in favor of the city was entered December 20, 1897. The court held that under the circumstances shown, the state, to enforce the payment of state and county taxes, was selling into private ownership the public property of one of its agencies and that the assessment was void; that the controller's order to the tax collector to sell on May 9, 1908, was without authority of law and void, and that the sale by the tax collector pursuant to such order was also void; that when the municipal corporation acquired the property under the circumstances shown, the title which the state took by the tax collector's deed was merged into the larger title which the municipality held under the trusts, both for the public as distinguished from the state and also for the state as the supreme sovereign.

In the instant case title was acquired by the State by purchase and the lien for the 1933 taxes was merged and lost in the title which the State acquired. Under the circumstances shown, the county's action in attempting to sell the property was void as was the deed issued to defendant based upon such proceedings. Smith v. City of Santa Monica, supra; City of Los Angeles v. Ford, 12 Cal.2d 407, 410, 84 P.2d 1042; Webster v. Board of Regents, 163 Cal. 705, 709, 126 P. 974. The state, by recording its deed and resolution of acceptance by the Park Commission, gave notice that the property involved was being held in trust as a part of the state park system. Thereafter proceedings to enforce a lien for taxes against the State were void, and defendant may not rely on the statutes of limitation to establish title by such proceedings. As was said in People v. Kerber, supra, 152 Cal. 734, 93 P. 879: ‘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.’

The State contends that the portion of the judgment which conditions the decree upon reimbursement to the defendant of amounts paid by him in acquiring the tax deed and paying property taxes subsequently levied is error.

The statutory provisions relating to the reimbursement of a purchaser of a tax deed which is held by the court to be void are found in sections 3728, 3728.1, 3729 and 3730 of the Revenue and Taxation Code, and section 3731 of the 1949 Revenue Laws of California, Revenue and Taxation Code.

Section 3728 provides, in effect, that before a tax deed is held void by a court, the court shall determine the correct amount of taxes, penalties and costs that should be paid upon redemption to discharge the tax and assessment liens of all taxing agencies and revenue districts had the purported tax sale not been held and the court shall order the former owner or other party in interest to pay such amount within six months as therein provided.

Section 3728.1 provides that if the amount required to be paid in accordance with section 3728 is not paid within six months, the court shall order a new tax deed issued by the county tax collector to the original grantee or his successor in interest and shall thereupon execute and deliver a new tax deed with certain enumerated provisions specified therein.

Section 3729 provides that when a court holds a tax deed given under the provisions of chapter or chapters 3, 4.3 or 8 of that part of the code or under former political code sections 3897 and 3897d void, the purchaser from the State is entitled to a refund from the county of the amount paid as purchase price in excess of the amount for which he has been reimbursed for taxes, penalties and costs. The refund shall be made in the same manner as a refund of an overpayment of tax, except that the claim shall be presented within one year after the judgment becomes final.

Section 3730 provides that: ‘The purchaser of tax sold or tax deeded property is entitled to a refund of the amount paid as purchase price whenever it is determined by the board of supervisors that the property belongs to the United States, this State, a city, or other political subdivision of this State and should not have been sold for taxes. The refund shall be made in the same manner as a refund of an overpayment of tax.’

Section 3731 of the 1949 Revenue Laws of California is as follows; ‘The purchaser of tax-sold or tax-deed property, upon execution of a quitclaim deed, is entitled to a refund of the amount paid as purchase price whenever it is determined by the board of supervisors, and upon the written approval of the district attorney, that the property should not have been sold for taxes. The refund shall be made in the same manner as a refund of an overpayment of tax.’

These statutory provisions are not applicable where, as here, the state holds the property involved in trust by the Park Commission for the people of the State of California. Under such circumstances the state is not subjected to the tax laws and its title cannot be alienated except under constitutional and statutory authorization. The doctrine of adverse possession cannot be applied to acquire the title of public lands held in trust for the public. People v. Kerber, supra; Henry Cowell Lime & Cement Co. v. State, supra.

If the quoted code sections were held to be applicable under the circumstances here shown, the title to the state would be conditioned upon a reimbursement to the purchaser, putting him in the position of being able to acquire adverse title to property held by the State in trust for the public, a situation which is contrary to the principles announced in the foregoing cases. Moreover, if the reimbursement were not made, as decreed by the court in the instant case, under the provisions of section 3728.1, the county tax collector would be required to issue a new tax deed to the original grantee or his successor in interest as designated in his order. Such proceedings could not affect title of property held by the state in trust for the public.

The provisions of sections 3730 and 3731, supra, indicate that the purchaser may be entitled to a refund to be determined by the board of supervisors of the taxing county. Therefore, the defendant, as the purchaser, must look to the county for reimbursement. Moreover, the trial court not only required the state to reimburse the defendant as to sums paid by him in acquiring the tax deed, but also as to sums paid by him to cover the annual assessments made by the county subsequent to the date of the tax deed to the date of the judgment. Section 3728, supra, requires reimbursements only as to sums expended by the purchaser ‘in pursuit of the state's title to the property’. In Clayton v. Schultz, 18 Cal.2d 328, 333, 115 P.2d 446, 448, it was held that reimbursement should not be allowed for payment of property taxes made by the purchaser subsequent to the tax deed.

The judgment is modified by striking therefrom the portion reading ‘It is further ordered, adjudged and decreed that the relief sought herein by the plaintiff is conditioned upon reimbursement to the defendant Lovell C. Chambers of the amounts paid by him for the purchase of said property under tax deed and the taxes paid thereon by the said Lovell C. Chambers from the date of said tax deed to the date of judgment herein.’

As so modified, the judgment is affirmed. Each party to pay own costs on appeal.

MUSSELL, Justice.

BARNARD, P. J., and GRIFFIN, J., concur.

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