HIGHLAND REALTY COMPANY v. CITY OF SAN RAFAEL

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

HIGHLAND REALTY COMPANY, a corporation, Plaintiff and Appellant, v. CITY OF SAN RAFAEL, County of Marin, First Doe, Second Doe, Third Doe, Doe Corporation, a corporation, Defendants and Respondents.*

Civ. 16544.

Decided: December 19, 1955

Thacher, Jones, Casey & Ball, San Francisco, Freitas, Allen, McCarthy & Bettini, San Rafael, for appellant. Harold Jos. Haley, City Atty., San Rafael, for respondent City of San Rafael. John G. Buresh, City Atty. of Town of San Anselmo, San Rafael, for respondent Town of San Anselmo.

This is an appeal from a judgment in a quiet title action decreeing that defendant cities are owners in fee simple absolute of the real property here in dispute, and that appellant realty company has no right, title, interest, claim or estate in said property.

The real property involved in this controversy had been owned in 1873 and for some years prior thereto, by Patrick Hayes. The Hayes ranch was a tract of approximately 150 acres situated in San Rafael Township, Marin County, which township in later years became in part, the incorporated cities of San Rafael and San Anselmo.

At that time the North Pacific Coast Railroad Company was a railroad corporation organized under the laws of the State of California. In February, 1873, Patrick Hayes, by two deeds sold certain lands to said railroad company for certain rights-of-way over and through lands owned by him, other than those here in dispute, for the construction and maintenance of a railroad. At about this time the railroad commenced an action in eminent domain against Patrick Hayes and other adjoining property owners. An amendment to the complaint in that action brought in the strip of land involved in the present litigation. Hayes, in his answer, alleged the value of this land to be ‘$4,000.00 in gold coin of the United States,’ and that he would suffer $12,000 in severance damages.

On February 8, 1875, prior to the trial of the eminent domain action, Hayes deeded to the North Pacific Coast Railroad Company for a consideration of $4,500, by grant deed, and to its successors and assigns forever, ‘All that right-of-way for the construction and use of said railroad upon, over and along a strip of land in San Rafael Township,’ described by metes and bounds, and which is the land which is the subject of the present controversy. His deed recited that it was made subject to a mortgage for $2,000, constituting a first lien on the premises. It provided that Hayes would have the right to open streets, avenues or crossings connecting his land with the county road (the San Rafael-Olema Road, now Fourth Street in San Rafael and Redhill Avenue in San Anselmo).

The railroad track apparently had been constructed on the land at the time of the execution of the deed, since that instrument recited that ‘the center line above described is a line run along the center of the railroad track as at present located and constructed on the land.’ The deed also contained a provision granting all and singular the tenements, hereditaments and appurtenances thereunto belonging or in anywise appertaining and the reversions, remainders, rents, issues and profits thereof, and provided that said company was to have and to hold all and singular the above described premises together with the appurtenances unto the said party of the second part, its successors and assigns forever.

On the same day that the deed was executed, the mortgage was recorded. The condemnation action was thereafter dismissed as to Hayes, and in October 1875, the mortgage was released, having been fully paid.

In March, 1902, the North Pacific Coast Railroad sold all its properties, including the land here in dispute, to the North Shore Railroad Company. On January 8, 1907, the North Shore consolidated with other companies to form the Northwestern Pacific Railroad Company.

After the death of Patrick Hayes, the Hayes ranch was distributed to the widow, Mary Hayes, subject to the right-of-way of the North Pacific Coast Railroad Company conveyed by deed of February 8, 1875. On June 5, 1893, Mary Hayes, conveyed the ranch by grant deed to Martin B. Magnesen ‘subject to the right-of-way of the North Pacific Coast Railroad Company conveyed by Patrick, Hayes * * * by deed of February 8, 1875.’

Magnesen began subdividing the ranch, and recorded two subdivision maps of San Rafael Heights. He reserved on these maps a buffer area 15 feet in width abutting for its entire length, the strip of land involved in this litigation. The remainder of the subdivision was divided into lots.

On January 14, 1913, Magnesen sold and granted to the Northwestern Pacific Railroad Company, in fee, the northerly 10 feet of the 15-foot reserved strip, that is the 10-foot strip adjacent to the railroad right-of-way. On March 31, 1921, he deeded by grant deed what remained of the Hayes ranch to Bacigalupi. In the deeds prior to the deed to Bacigalupi, the northern boundary had been described as the Olema Road, while in the deed to Bacigalupi that boundary was described as the Olema Road (Sometimes called Fourth Street) and the right-of-way of the Northwestern Pacific Railroad Company which was conveyed by Patrick Hayes to the North Pacific Coast Railroad Company. Magnesen's deed to Bacigalupi excepted therefrom the 10-foot strip and certain lots which had been sold.

On February 14, 1923, Bacigalupi and his wife conveyed by grant deed to Davis, using a description identical to what in the deed from Magnesen, Davis and wife conveyed to the Highland Realty Company, a corporation (the plaintiff and appellant herein), on August 25, 1925, by a grant deed similar to the prior deed, but with additional lots excepted.

On March 1, 1941, the Northwestern Pacific Railroad Company discontinued suburban service, and on November 9, 1942, was issued a permit authorizing abandonment of the portion of the line which included the right of way involved in this action. The dismantling of the railroad line on this portion of the right-of-way was completed on March 31, 1943.

On February 1, 1945, the Northwestern Pacific Railroad Co. executed two quitclaim deeds, one to the City of San Rafael and one to the City of San Anselmo, quitclaiming to the respective cities that portion of its former right-of-way which lay within the corporate limits of each city. The railroad by these deeds also quitclaimed to each city the portion of the 10-foot strip south of and adjoining the right-of-way, which lay within the corporate limits of each city. Seventeen other parcels of land were included in the railroads' deed to San Rafael, and the city paid a total purchase price of $2,650. The City of San Rafael by a charter ordinance set up funds for the purchase. The quitclaim deed from the railroad company to the City of San Anselmo recited a consideration of $10.00.

The public began using this strip of land to some extent for parking purposes in 1942, and as a roadway in 1943. The use by the public was continuously increased. Beginning early in 1946, the two respondent cities reconstructed the surface of the former right-of-way so as to improve its use for traffic. From then on until 1948 the cities maintained and improved this road, known locally as the ‘Miracle Mile.’ In 1948, the cities put on armor pavement on the surface and there was a public opening of the roadway as a one-way street. From the time on there was a marked increase in traffic. During this period, Orendorff, appellant's agent since 1944, had his office a short distance from this roadway. He testified that on two occasions since 1946 he had protested to the City Manager of San Rafael in regard to the city trespassing and making improvements on appellant's property.

The appellant contends that he was the owner in fee of the strip of land here involved, that the original conveyance to the railroad was an easement and not a fee, hence the fee remained in appellant. Respondents contend that the description in the deed to appellant's predecessors eliminated the subject land, hence appellant never had title to this area; that the original owner granted a fee title to the railroad whose ultimate successor conveyed to respondent cities.

The cities also claimed title by adverse possession under color of title. The City of San Rafael pleaded nine affirmative defenses. The City of San Anselmo pleaded the same nine defenses, but added a tenth defense of dedication of the land as a public highway. The City of San Rafael was given permission by the trial court to also add this tenth defense to conform to proof.

The trial court found that it was not true that appellant ‘was, at the time of the commencement of these actions, nor for a long time hitherto the owner of any estate, right, title or interest in and to that certain piece or parcel of land’ (thereafter described); that defendant and each of them claimed an interest and estate in and to said real property ‘but that said claim was not adverse to said plaintiff, it being found true that plaintiff at the time of the commencement of these actions had no estate, right, title to, or interest in said real property’; ‘that it is true that each defendant is the owner in fee simple absolute’ of so much of said property as lies within its confines.

Appellant first complains that respondents, after having successfully moved the court under section 597, Code Civ.Procedure, to set the special affirmative defenses for trial before other issues in the case, then reversed their position and demanded that appellant go forward in the ‘normal course of trial.’ They contend also that the trial court committed error in not making findings of fact on these special defenses.

After the special defenses had been set for trial, appellant moved that the action be tried without a jury. The court made an order denying appellant's motion that the action be tried without a jury as to the issue of damages, but ordering that the issue of ownership be pretried by the court with other issues previously ordered to be pretried.

Appellant has not shown how it was prejudiced by having to go forward with the case in the usual order. Appellant had at all times the burden of establishing by a preponderance of the evidence that it had title to the property in question. Presumably, appellant was ready for trial on the issue of title at the time the case was called for trial, for the special defenses negative title in appellant and set up title in defendant cities. The trial court is vested with a wide discretion in regulating the order of proof. Unless a clear abuse of discretion can be shown, with prejudice resulting to the adverse party, an appellate court will not reverse on the ground that the evidence was admitted out of regular order. Mayers v. Alexander, 73 Cal.App.2d 752, 763, 167 P.2d 818; 24 Cal.Jur. 764–766. In the cited case, an action for specific performance, the court directed that the issue raised by defendant's affirmative defense be tried first, and after receiving some evidence thereon, ordered plaintiff to go forward in the regular way. Judgment was for defendant and plaintiff appealed. It was held that no prejudice resulted, since it did not appear that either party was prevented by such order from producing all available evidence, or that either party could produce evidence additional to that which had been offered.

The findings in the present case are very general, but they dispose of the ultimate issue as far as appellant is concerned. They find that fee title is not in appellant, and that defendant cities hold the title in fee simple absolute. In San Jose Land & Water Co. v. San Jose Ranch Co., 129 Cal. 673, 62 P. 269, the court made no findings upon the affirmative allegation of the answer in a quiet title suit, but disposed of the case entirely on the finding that plaintiff had no title to be quieted. There defendant did not complain that its title was not adjudicated, and it was held that plaintiff was not in a position to complain. Here defendant's title was adjudicated, but if the evidentiary basis of that adjudication is not recited in the findings, it would seem that appellant may not complain, if there is evidence in the record to support the finding that appellant has no title. It is true that a great burden is imposed upon this court in a case such as this, with lengthy transcript and numerous exhibits, and more detailed findings would certainly have been desirable. Detailed findings on defendant's claim of title are not necessary, Willis v. Holback, 33 Cal.App.2d 145, 91 P.2d 140. It has been held that a finding of good record title is not inconsistent with a finding of title by adverse possession. Den v. Spalding, 39 Cal.App.2d 623, 104 P.2d 81.

Appellant argues that his motion for judgment on the pleadings should have been granted, because respondent's general allegations of fee-simple ownership were negatived by specific allegations showing the weakness of respondents' title, since some of the defenses set up title by adverse possession which could be productive only of easement and not fee title, and thus nullify the defenses that they have fee title. However, if each defense is consistent in itself, it is of no consequence that it may be inconsistent with other specific defenses. In this state a defendant may set up by answer as many defenses as he may have, regardless of their consistency, and he will prevail if one is found to be good. 21 Cal.Jur. 133–136, §§ 89, 90.

If the findings that appellant had no right, title, interest or estate in the property, and that respondent cities were owners in fee simple absolute of said property, are supported by substantial evidence, then it is of no consequence to appellant that more detailed findings were not made.

The deed of February 8, 1875 from Patrick Hayes to the North Pacific Coast Railroad Company was, as earlier noted, a grant deed in consideration of $4,500 in gold coin. There is, of course, the statutory presumption that a fee-simple title is intended to be passed by such a deed unless it appears from the grant that a lesser estate is intended. Civ.Code, § 1105; 15 Cal.Jur.2d 542, § 144. The granting clause in the deed herein conveyed to the party of the second part ‘its successors, heirs and assigns forever, all that right-of-way for the construction and use of’ the railroad ‘upon, over and along a strip of land’ thereafter described by metes and bounds, and the whole containing 3 65/100 acres. The center line of the strip was described as ‘a line run along the center of the railroad track as at present located and constructed on the land.’ Hayes agreed therein to move the fence from the south side of the Olema Road to the south side of the strip of land conveyed, and the railroad agreed to construct a fence on the north side of said strip. The diagrams and maps of the right of way show that a narrow piece of the Hayes Ranch on the northerly side, some 1,525 feet in length and varying in width up to approximately 40 feet and bordered on the north by the Olema Road, was separated from the remainder of the ranch by the right-of-way. Both east and west of this finger of land, the Olema Road bordered on the strip of land conveyed to the railroad by the deed of 1875.

It is true that deeds purporting to convey the fee have often been construed as conveying easements only if the deed clearly indicates that the conveyances are solely for railroad purposes. 132 A.L.R. 159–168. As said in Tamalpais Land & Water Co. v. Northwestern Pac. R. R. Co., 73 Cal.App.2d 917, 928, 167 P.2d 825, 830, ‘The question is obviously one of intent to be gathered from the language of the conveyance and the surrounding circumstances.’ In the cited case it is stated that if a deed is ambiguous as to whether an easement or fee subject to a condition subsequent is conveyed, the cases are quite uniform that the fact that no monetary consideration was paid for the grant is a factor of considerable importance indicating that the grant conveys an easement and not a limited fee. (Emphasis ours.) In the Tamalpais case the construction of easement was favored because no monetary consideration was paid to the grantor, but moreover, the grantor paid a large sum to the grantee to defray part of the cost of construction. In this case the facts and circumstances before the court clearly support the view that a fee title was conveyed to the railroad.

In the instant case, a consideration of $4,500 was paid for 3 65/100 acres of land, well over $1,000 per acre. In addition, the railroad built a new fence on the north side of the right-of-way which protected the finger of land cut off from the remainder of the ranch. It will be recalled that the strip of land conveyed by the aforesaid instrument for the sum of $4,500 was the same land which Hayes in his answer to the pending condemnation suit had alleged to be of the actual value of $4,000. He had also alleged $12,000 severance damages by reason of the cutting off of the remainder of his ranch from fronting on the San Rafael-Olema Road. The deed herein took care of this matter also, for it provided that Hayes could open up as many streets or crossings as he deemed fit over the railroad and connecting his land with the county road. Hence full consideration was paid by the railroad for the deed as shown by the evidence before the trial court. The trial court was justified from this alone in concluding that a fee had been conveyed and not a mere easement.

In the Tamalpais case, above cited, the deed itself restricted the railroad in the use of the lands for it provided that the grantee was to have and hold such lands “for the uses and purposes aforesaid and none other and for so long as said railroad shall be so maintained and operated and no longer”, and if the grantee should “fail or cease to maintain and operate said railroad * * * then it will at once on demand surrender and deliver up the possession of said land”. There is no such restriction imposed on the grantee in the present case. The instrument herein rather recites that the grantee is to have and to hold the described premises ‘together with the appurtenances unto the said party of the second part, its successors herein and assigns forever.’

The construction that the parties themselves put on instruments is of some weight, and it is significant that when Magnesen conveyed to the railroad the 10-foot strip which adjoined and paralleled the right-of-way he conveyed it in fee, which hardly seems consistent with a belief that he owned the right-of-way in fee, and that he was deliberately cutting off that strip from the remainder of his land by this 10-foot strip.

It is the contention of appellant that section 22 of the Articles for the Incorporation of Railroads of 1861 requires the immediate reversion of the estate held by the railroad to appellant whether that interest is an easement or determinable fee, once the railroad has abandoned the use of the land for track purposes.

Section 22 of the above act, Stats.1861, pp. 607, 618, provides that a railroad may enter upon and acquire any land for the construction of tracks, etc., ‘but such company shall not hold such real estate, or any right, title, or interest, therein, acquired, or used solely, or mainly, for the construction, or maintenance, of the track, or tracks, of said railroad, beyond the time of the legal existence of said company, nor after the location of said track, or tracks, has been changed therefrom, nor after the said company shall have failed, or ceased, to use the same, for the maintenance of such track, for the space of five years continuously; but in each of such cases, the said real estate, and all right, title, and interest, therein, shall revert to the person, or persons, and his, or their, assigns, from whom the same was acquired by said company.’

It is clear from sections 3 and 17 of the same act that the railroad had the capacity to make contracts, acquire real and personal property, purchase, hold and convey any and all real and personal property, and it might receive, hold, take and convey real estate by deed or otherwise in the same manner as a natural person. The provisions of section 22, therefore, appear to be a condition imposed on the railroad's estate which condition is not for the benefit of the grantors, primarily, but rather for a public purpose—to insure the public continuance of railway service. See, Lemon v. Los Angeles Terminal Ry. Co., 38 Cal.App.2d 659, 102 P.2d 387, for discussion of this type of statutory provision. The condition must therefore be interpreted as a condition subsequent, and the estate in fee continues in the railroad or its successors in title unless the grantor or his successors have asserted the right of re-entry for conditions broken or have brought suit for recovery of possession.

Considering this suit in quiet title as an assertion of the right of re-entry by appellant, was it brought in time to escape the bar of the applicable statute of limitations, Code Civ.Proc. § 320? The last train was run over the line in February, 1941; the rails were removed in 1942, and in that year the Interstate Commerce Commission issued the railroad a certificate permitting abandonment of this branch line. On March 31, 1943, the dismantling of the line was completed.

At the trial the parties did not rely on the first contingency, namely, that the North Pacific Coast Railroad's charter having expired in 1922, that the right of re-entry accrued at that time. Since under the act of 1861, a railroad company had the right to convey property to the same extent as a natural person, appellant's interpretation appears to be correct, that the railroad's estate could be conveyed to another railroad, but that if it had not earlier conveyed such property, it could not hold it beyond the expiration of its charter.

It appears that the second contingency is controlling here, and that such contingency had occurred by March 31, 1943, at the latest. That is, that ‘the location of the track, or tracks, has been changed therefrom.’ When such a condition has occurred under the act, whatever right the grantor or his heirs have, accrues at that time. Appellant contends that this condition does not apply unless the track is taken up and relocated at another place. However, the statute simply states ‘changed therefrom’, which would appear to mean ‘removed therefrom with no intention of restoring it to the same location.’ That there was no intent here ever to restore tracks to this right-of-way was proved by application for abandonment of the line to the Interstate Commerce Commission, and the issuance to the railroad of the permit, followed by the dismantling of the track. Since the action herein was not brought until May 21, 1951, more than eight years after the entire abandonment of the line, the bar of the five-year statute had long since run. The fee, therefore, remained in the railroad and was transferred to the respondent cities by the quitclaim deeds in 1945.

Appellant contends that the third contingency in section 22 must be applied in this instance, namely, that the railroad may not hold title ‘after the company shall have failed * * * to use the same for the maintenance of such track for the space of five years continuously.’ If this condition was applicable, a period of five years must elapse before the right of re-entry would accrue, and another five years must pass before the right would be barred. Thus appellant would have ten years in which to bring an action after the failure to maintain a track on the right-of-way. The purpose of the five-year provision is obviously to furnish clear evidence of abandonment of railroad operations. Where, however, as here, the railroad has officially abandoned operations and removed its track, the condition that has arisen appears to be the second, the location of the track has been changed from the land involved, and it has been clearly established that said land has been abandoned as a right-of-way. Since it has been held, that when language in the deed providing that land is to be used for railroad purposes only, and if it ceases to be so used shall revert to the grantor, their heirs and assigns gives rise to a right of re-entry for condition broken, rather than a fee on conditional limitation, Hannah v. Southern Pac. R. R. Co., 48 Cal.App. 517, 192 P. 304, it is reasonable to interpret in a similar manner a right of reversion granted by statute for failure to continue railway operations.

We believe that the reasoning in the case of Lemon v. Los Angeles Terminal Ry. Co., supra, is applicable to the statute here involved, although that case deals with forfeiture provisions under another railroad statute, Stats.1880, Ch. 57, p. 43, and that the provisions of section 22 of the act of 1861 are correctly interpreted as forfeiture provisions. Forfeitures of estates are not favored and the estate of the grantee is not automatically terminated by the breach of the condition until the right of re-entry has been exercised. See, 9 Cal.Jur. 369, § 220; 12 Cal.Jur. 637, § 6; 22 Cal.Jur. 811, § 14.

It is urged by respondents that in any event, since the act for incorporation of railroads of 1861 was repealed on September 22, 1951, Stats.1951, p. 2258, Public Utilities Code, § 25002, and this being an action to enforce a forfeiture, the case of Lemon v. Los Angeles Terminal Ry. Co., 38 Cal.App.2d 659, 102 P.2d 387, is decisive of this matter. That case noted that it is established that there is no vested right in a public law that is not in the nature of a private grant, that no matter how injuriously the repeal may affect a party, it may be abrogated, and the unconditional repeal of a statute pending action stops all pending actions where the repeal finds them. Even if judgment has been entered and the cause is pending on appeal, the reviewing court must dispose of the case under the law in force when the decision is rendered. This same rule applies to remedial statutes unknown to the common law.

Appellant points out that section 22 of the 1951 statute repealing the act of 1861, provides that any corporation existing before 12 o'clock m. of January 1, 1873, is affected by the new provisions unless it has elected to continue its existence under the provisions of the Civil Code repealed by this code, Public Utilities Code, ‘but the laws under which such corporations were formed and exist continue to apply to all such corporation, notwithstanding their repeal by this code’. The North Pacific Coast Railroad was organized in 1871 and confirmed its existence under the 1861 act by later amendments to its articles. However, the railroad that we are now concerned with is the Northwestern Pacific Railroad which the record shows was organized in 1907. The condition, it is to be recalled, is imposed by the statute and not by any deed to that railroad. Therefore, the Lemon case, supra, would appear to be applicable to the instant case, hence the repeal of the statute while this action was pending, makes impossible the divesting of the fee. The respondents therefore received fee title from the railroad through the quitclaim deeds.

It is unnecessary to discuss respondents' defense of adverse possession in view of the foregoing determination. Nor, is it necessary to consider the defense of common-law dedication as a highway, since this defense would not be supported by the findings herein, for under that doctrine the cities would get only an easement for highway purposes. 15 Cal.Jur.2d 262, § 5; 344, § 56; Lantz v. City of Los Angeles, 185 Cal. 262, 196 P. 481.

In view of the foregoing it is clear that the findings and judgment find support in the record before us and accordingly the judgment must be affirmed.

KAUFMAN, Justice.

NOURSE, P. J., and DOOLING, J., concur.

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