Opinion
Rehearing Denied March 1, 1961.
Hearing Granted March 29, 1961.
Opinion vacated 14 Cal.Rptr. 651.
John W. Preston, John W. Preston, Jr., Los Angeles, S. V. O. Prichard, Hollywood, and Peter E. Giannini, Los Angeles, for appellant.
Gerald Desmond, City Attorney, Long Beach, O'Melveny & Myers, and Pierce Works, Los Angeles, for respondent City of Long Beach.
Stanley Mosk, Atty. Gen., and Howard S. Goldin, Deputy Atty. Gen., for respondent People of the State of Cal.
VALLEE, Justice.
This is a companion case to Mallon v. City of Long Beach, 11 Cal.Rptr. 8. Reference is made to the opinion in that case for the background facts relative to the Long Beach tidelands trust and the general principles of law applicable to the award of attorney's fees and expenses of suit where a fund has been created or preserved.
Prior to 1951 the Legislature had committed to the trusteeship of the City of Long Beach all tidelands and submerged lands, referred to as tidelands, lying within the municipal limits of the city. (Stats. Shortly after the Mallon suit was filed, Alma Swart, represented by Theodore R. Gabrielson, a member of the State Bar, intervened in the suit. In her petition for leave the intervene, Alma Swart stated 'she is and has been a resident and taxpayer of the said City of Long Beach, a municipal corporation, for more than one year last past, having paid a tax to said city within one year prior to the commencement of the proceeding herein'; she 'has a direct interest in the matter in litigation in the above entitled action as a resident and taxpayer of the City of Long Beach and a property owner therein, said interest in many respects being similar to that of plaintiff, Felix Mallon; that your petitioner has a direct interest in that if money belonging to the city is illegally paid out or expended by its officers, the inevitable result would be a detriment to the taxpayers of said city, with a corresponding increase, either directly or indirectly, of the burden of taxation upon the property owners therein; that the interest of your petitioner is of such a direct and immediate character that petitioner will either gain or lose by the direct legal operation and effect of the judgment herein; that as hereinafter alleged, there are various questions of constitutionality as to the above mentioned act of 1951, and all such questions should be before the court and adjudicated or the taxpayers of said city may find at a later date after moneys have been spent that such expenditures were illegal and improper, and if such money must be paid back or returned, the tax burden would be seriously affected.' This petition was denied. In a second petition for leave to intervene, Alma Swart set forth the same facts as to her status as she had stated in her first petition for leave to intervene. This petition was granted.
The complaint in intervention alleged that Alma Swart was 'a citizen of the United States of America and the State of California, and a resident of the City of Long Beach, and she is and has been a resident and taxpayer within said city having paid a tax thereto within one year prior to the commencement of this proceeding'; by the adoption of the 1951 statute the Legislature 'wrongfully attempts to abdicate the State's trust of the property and funds in which the whole people of the State of California are interested and which are held in trust for all of the people of the State of California.' Substantially the same facts were alleged as in Mallon's complaint except that the Mallon complaint, quoting part of the 1951 statute, omitted the provision releasing 100 per cent of the dry gas. The complaint in intervention quoted the 1951 statute in toto.
The prayer was that Long Beach and its officers be enjoined from appropriating and expending any moneys derived from the production of oil and dry gas from tide and submerged lands 'for the purposes other than the improvement and conduct of a harbor on said lands and the construction, maintenance and operation on said lands of wharves, docks, piers, quays and other utility structures and appliances necessary or convenient for the promotion and accom[m]odation of commerce and navigation, Demurrers were sustained to the complaint of Mallon and to the Swart complaint in intervention without leave. On appeal the judgment was reversed. The Supreme Court held that partial revocation of the trust effected by the 1951 statute necessarily resulted in reversion to the state of moneys released from the trust and Long Beach held such funds on a resulting trust for the state. Mallon v. City of Long Beach, 44 Cal.2d 199, 282 P.2d 481, decided April 5, 1955.
On August 25, 1955 in the course of proceedings on remand the trial court by exparte order granted leave to the People of the State of California and Robert C. Kirkwood, the State Controller, to intervene, and their complaint in intervention was filed on that date. The defendants moved to strike the complaint in intervention filed by the People. On March 1, 1956 the motion was granted.
On September 16, 1955 the attorney general commenced a separate action, called the People's case, to protect the interests of the state in the funds which had been declared released from the trust. A compromise and settlement of that case were negotiated between Long Beach and the state. The Legislature passed an Act which was signed by the governor on April 13, 1956 in which it found ans determined, among other things, that: as a result of stipulations between the attorney general and the City of Long Beach, $111,000,000 had been impounded and certain future income would be impounded and held intact by the city pending determination of the litigation; the total amount of revenue secured and held by Long Beach for the benefit of the state free from the public trust on or before January 31, 1956 was $120,000,000; the public interest would be served by prompt release of these funds. The Act authorized the attorney general and Long Beach to enter into stipulations as to the amount, not less than $120,000,000, to be paid to the state. A stipulation as to entry of decree was filed on April 13, 1956, and pursuant thereto on September 11, 1956 a consent judgment was entered ordering Long Beach to account for, pay and deliver to the state controller $120,000,000 and to make monthly transfers of future revenue.
People of the State of California, et al. v. City of Long Beach, et al., Los Angeles Superior Court No. 649466.
Stats.1957 (1956 Extraordinary Session) c. 29, p. 341.
On March 27, 1956, Theodore R. Gabrielson, referred to as petitioner, filed a petition in the Mallon suit for attorney's fees and expenses of suit and for a lien on the trust funds then in possession of Long Beach. The petition averred petitioner had performed services in the Mallon suit. The services were alleged in extenso. It also averred the rendition of services after the going down of the remittitur in cooperating with the state in obtaining the released funds from Long Beach. It averred petitioner had moved to intervene in the Mallon suit 'on behalf of one Alma Swart, a citizen, resident and taxpayer of the City of Long Beach, County of Los Angeles, State of California'; '[i]ntervener Alma Swart contended that the 1951 Act operated as a release of said money to the State of California for the benefit of all the people of the State'; 'petitioner argued in the Mallon Case that the effect of the 1951 Statute was to release said moneys, not to the City of Long Beach but to the beneficiaries of the trust, namely, all the people of the State of California'; 'the Attorney General of California refused to take any action of any type whatsoever on behalf of the State of California'; by reason of petitioner's services trust funds 'have been restored to the trust and/or preserved from misappropriation and waste by the trustee; that a substantial amount of trust funds is in the possession of the City of Long Beach as trustee of said trust'; the court had On January 11, 1957 the state filed a motion in the Mallon suit for leave to intervene. In an affidavit filed in support of the motion it was stated: 'intervention is sought for the limited purpose of permitting the State to defend and protect its property and beneficial interest in oil and dry gas revenues against the claims thereon by Theodore R. Gabrielson.' The motion was granted.
Among other things, the state's complaint in intervention alleged: the court had no jurisdiction of the subject of the claim set forth in the petition of Mr. Gabrielson; any award of attorney's fees and expenses of suit would constitute a charge on the moneys in the resulting trust payable by Long Beach to the state pursuant to the judgment in the People's case, and the state is the equitable owner of such moneys in its sovereign capacity; 'the Legislature of the State of California has not made any appropriation nor has it made any fund available for payment of the attorney's fees and expenses of suit sought by the amended and supplemental complaint of Theodore R. Gabrielson herein; that the Legislature of California has not provided by law for the settlement of the attorney's fees or the expenses claimed in said petition of Theodore R. Gabrielson herein; that said Alma Swart and said Theodore R. Gabrielson have not, nor has either of them, filed or presented any claim to the State Board of Control for payment of such attorney's fees or expenses.'
The state's complaint in intervention was also a demurrer to the petition for attorney's fees and expenses of suit. The demurrer was overruled. The state and Long Beach separately then petitioned the District Court of Appeal for a writ of prohibition commanding the superior court to desist from further proceeding on the petition for fees and expenses of suit. Alternative writs were denied without opinion. Petitions for hearing were denied without opinion.
A hearing was had on the petition of Mr. Gabrielson in consolidation with the petition of Stratton and Taylor; and a judgment was rendered that petitioner take nothing.
Mallon v. City of Long Beach, Cal.App., 11 Cal.Rptr. 8.
Among other things the court found: at and prior to the commencement of the Mallon suit, Long Beach intended to expend the moneys released by the 1951 statute for general municipal purposes; Alma Swart intervened in 'her purported capacity as a municipal taxpayer of the City of Long Beach'; petitioner rendered legal services in the Mallon suit.
The court further found: by contending that the 1951 statute released the money to the state, Alma Swart and petitioner abandoned the interests of the class which they, and each of them, purported to represent; the ultimate objective of petitioner and of Alma Swart was to deprive Long Beach and the state of all title and interest in the oil and gas contained in the Long Beach submerged lands covered by certain federal leasing applications made by Alma Swart and others, and to establish their assignees' ownership of the oil and gas revenues therefrom; they were motivated by personal interests antagonistic and hostile to the title and interests of Long Beach and the state in and to the oil and gas resources The court in part concluded: The application of petitioner is without equity. Petitioner is not entitled to any award in equity either as against defendant City of Long Beach in any capacity in which the city has appeared, or as against intervenors People of the state of California, et al., or as against any fund or funds in the custody or possession or under the control of the city or of the interveners.
Petitioner appeals from the judgment denying him compensation and reimbursement for expenses of suit.
Decisive of petitioner's claim against the state and the resulting trust funds is the doctrine of sovereign immunity. The California Constitution, Article XX, Section 6, provides:
'Suits may be brought against the State in such manner and in such courts as shall be directed by law.'
This provision prohibits suits against the state in the absence of specific and express statutory provision. It permits the Legislature to prescribe when and how suits may be brought against the state. Hayashi v. Alameda County Flood Control, 167 Cal.App.2d 584, 586-587, 334 P.2d 1048. 'Neither the State in its own person, or as represented in its local subordinate governments, can be summoned to answer before its Courts, except by its own consent, nor can its property.' People v. Doe G. 1,034, 36 Cal. 220, 223; Artukovich v. Astendorf, 21 Cal.2d 329, 331, 131 P.2d 831.
Miller & Lux v. Batz, 131 Cal. 402, at page 105, 63 P. 680, at page 681, says:
'Although the action is against the respondent as treasure of the county, it is for the purpose of recovering money which has been paid to the state, and which the state, for its own convenience, has deposited with the county as one of its governmental agencies. The plaintiff's right to maintain the action against the respondent is measured by his right to maintain it against the state.'
Also see Smith v. Reeves, 178 U.S. 436, 20 S.Ct. 919, 44 L.Ed. 1140; Schwing v. Miles, 367 Ill. 436, 11 N.E.2d 944, 947, 113 A.L.R. 1504, 1509. In El Camino Irr. Dist. v. El Camino L. Corp., 12 Cal.2d 378, 85 P.2d 123, it was held that once it is established property is owned by the state, the rule that state property cannot be levied on and sold except as permitted by the Legislature is applicable; and that the purpose or capacity in which the state property is held does not alter the rule. In City of Oakland v. Oakland Water Front Co., 118 Cal. 160, 195-196, 50 P. 277, it was expressly determined that tidelands which are held by a municipal grantee subject to the public trust for commerce and navigation are immune from judicial process and not subject to levy and sale under execution.
The doctrine of sovereign immunity applies to actions in rem to the same extent as actions in personam. The Restatement says:
'As a sovereign is not subject to the jurisdiction of the court unless it has consented to the exercise of jurisdiction over it, so the property of a sovereign is not subject to the jurisdiction of the court without its consent. Neither a proceeding in personam nor a proceeding in rem or quasi in rem can be maintained against a State without its consent.'
(Rest., Judgments, § 32, Comment j.) The rule generally applied in derivative suits that one who benefits although not a party to the action must share in the expense of recovering or protecting a fund may not be applied to the state without its consent. Where no consent exists, a judgment recovered against the state is void. (45 Cal.Jur.2d 512, § 159.) The Legislature did not by statute consent to suit by petitioner against the state or consent to recovery by petitioner of attorney's fees and expenses of suit from the resulting trust funds.
Petitioner contends the decisions in the proceedings for writs of prohibition are res judicata of the defense of sovereign immunity. The contention may not be sustained. The decisions in these proceedings were not on the merits. Denial without opinion of an alternative writ adjudges nothing except that for reason sufficient to the court the writ should not issue; this is true except in rare instances. The denial without opinion by the Supreme Court of a petition for a writ of prohibition and for a hearing after similar denial by the District Court of Appeal is not res judicata of any legal issue presented by the application unless the sole possible ground of the denial was that the court acted on the merits or unless it affirmatively appears that such denial was intended to be on the merits. Confidential, Inc. v. Superior Court, 157 Cal.App.2d 75, 78, 320 P.2d 546. The records in those proceedings are before us. It appears not only that the decisions were not on the merits, but it affirmatively appears they were not intended to be on the merits. The denials of the writs of prohibition did not foreclose determination of the question of the state's immunity to petitioner's application for fees and expenses of suit.
Petitioner argues that intervention by the attorney general in the Mallon suit constituted a waiver of the state's immunity. The attorney general did not appear generally in the Mallon suit. Since consent of the state is a prerequisite to authorize the maintenance of a suit, the attorney general could not, by merely intervening in the Mallon suit for the limited purpose of defending against the petition for an allowance of attorney's fees and expenses of suit, waive the state's immunity. Bekins Van & Storage Co. v. State of California, 135 Cal.App. 738, 742, 28 P.2d 61. The attorney general is subject to the general rule that state officers can neither waive the substantive rights of the state without explicit authority nor create estoppels which operate against the public interest. He may not, by voluntarily appearing, waive a jurisdictional defect which would be tantamount to a statutory consent by the state to be sued. (6 Cal.Jur.2d 88, § 6.)
The facts in State of California v. Superior Court, 14 Cal.App.2d 718, at page 719, 58 P.2d 1322, at page 1323, were these:
'This is an application for a writ of prohibition. It involves a consideration of the following facts: Martin B. Joost filed a complaint in the Superior Court of the State of California in and for the City and County of San Francisco, in which he alleged that while crossing the intersection of Dorchester street and Claremont boulevard in San Francisco he was struck and in-injured by a Ford car which was being operated by A. E. Kern, who was at the time acting within the scope of his employment and as the agent and employee of the State of California. He named as defendants the State of California, the Regents of the University of California, the University of California and A. E. Kern. The state was served with summons and thereafter appeared by a special appearance and made a motion that the place of trial be changed from the city and county of San Francisco to the county of Sacramento. The motion was denied on February 4, 1935. Later the defendant filed a general demurrer which was overruled and thereafter the defendant filed an answer. Still later, on motion duly made, the action was set down for trial. The other defendants were not served and did not appear. Asserting that the order denying the motion to change the place of trial was in excess of jurisdiction, the state applied for this writ.'
Answering a contention that the state had waived its right of immunity, the court
'To create a waiver there must be an actual intention to waive an existing right. (25 Cal.Jur. 927.) Here there is no evidence of such intention. Moreover, power to waive must be shown to have been conferred on the state's agents. (Hampton v. State Board of Education, 90 Fla. 88, [105 So. 323, 42 A.L.R. 1456, 1483, 1484].) Our statutes show no such power was granted. Again, as we have shown above, the limitations and conditions imposed by the state in actions brought against it are jurisdictional. Being such they may not be waived. (59 C.J. 304; Buckles v. State, 221 N.Y. 418 [117 N.E. 811].) At page 813 the Supreme Court of New York said: 'Being thus a question of jurisdiction, it could be raised at any time, and could not be waived by any officer or authority representing the state.''
At bar there was no evidence that any authority had been conferred on the attorney general to waive the state's right of immunity. By the complaint in intervention for the sole purpose of defending against petitioner's claim for attorney's fees and expenses of suit, the attorney general merely resisted the claim. The intervention of the attorney general for that limited purpose did not make the state a party to the basic controversy in the Mallon suit in which petitioner's services were rendered. The state did not consent to be sued in the Mallon suit; nor did it consent to petitioner's suing it for services rendered by him in the Mallon suit. We hold the sovereign immunity of the state was not waived by the intervention of the attorney general for the limited purpose of defending against petitioner's claim.
Petitioner contends that pursuant to the sanction of the Legislature the state waived its sovereign immunity by agreeing in the stipulation for judgment in the People's case to reimburse Long Beach for the amount of any judgment in the Mallon suit for attorney's fees and expenses of suit recovered against Long Beach by petitioner. The Act of the Legislature merely authorized a compromise settlement between the state and Long Beach. It in no way authorized Patton v. City of Los Angeles,
The stipulation in part read: '11. Notwithstanding any other provision in this stipulation:
Petitioner's application for fees and expenses of suit and for a lien on the funds which in the Mallon suit were adjudged to be the property of the state constituted an effort to sue the state. People ex rel. Department of Public Works v. Buellton Development Co., 58 Cal.App.2d 178, 184, 136 P.2d 793. The resulting trust revenues are the property of the state. The judgment in the People's case requires Long Beach to remit such revenues to the state controller for deposit in the state treasury. Long Beach merely acts as a collection agency for the state. Thus the resulting trust revenues are state moneys in the temporary custody of Long Beach. Petitioner's application was a direct claim against state property. It involved a direct and substantial interest of the state.
We conclude that the doctrine of sovereign immunity bars petitioner's application against the state for attorney's fees, expenses of suit, and for a lien on the resulting trust funds. In view of our conclusion, other points made by petitioner need not be discussed.
As we read petitioner's brief, he does not now make any claim against the City of Long Beach as such; he does not seek to reach the municipal treasury, directly or indirectly. He has no claim against the funds remaining in the Long Beach tidelands trust which were not affected by the 1951 statute. Such funds were not involved in the Mallon suit.
Affirmed.
We concur.
SHINN, P.J., and FORD, J., concur.
'(a) The parties to this stipulation each recognize that there is at present one claim on file in pending litigation which may diminish the amount or amounts payable by the City of Long Beach to the State of California under the provisions of this stipulation; and that there is a possibility that other claims of a similar nature may be filed or asserted in the future.
'(b) Said parties also recognize that, by reason of such claim or claims, the City of Long Beach may be subjected to conflicting demands as between the State and the holders of such claims with reference to the amounts in this stipulation provided to be paid by said City to the State; and that it is the intention of the parties to this stipulation that the City of Long Beach shall not be subjected to plural liability as to any amount or amounts so required to be paid.
'(c) The parties hereto therefore stipulate and agree that, to the extent necessary to protect the City of Long Beach from any such imposition of plural liability, they will enter into such further stipulations or engagements as will protect the City of Long Beach from the imposition of any such plural liability; and in the event of the failure of the parties to agree as to the terms and provisions of any such stipulation, the City of Long Beach is hereby authorized (1) to withhold from the payments required by Paragraph 3 of this stipulation such amount or amounts as may be reasonably necessary to enable the City of Long Beach to satisfy or discharge any order or judgment, final after appeal or the lapse of time for the taking of an appeal, of a court of competent jurisdiction upholding such claim or claims; and (2) in the event of the satisfaction of any such judgment or judgments by the City as aforesaid, the amount of any payment or payments made by reason thereof shall be deemed to have been paid to the State pursuant to the provisions of Paragraph 3 hereof.'