Central Pacific Ry. Co. v. Droge , 171 Cal. 32 ( 1915 )

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.]

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] Appeals are here presented by the defendant from the judgment and from an order denying his motion for new trial.

The object of the action was to recover possession of four strips of land, two of which extend across the west half of section 23, and two across the northwest quarter of section 27, all in township two south, range five east, in San Joaquin County. They are each one hundred and fifty feet in width and are parts of the strip of land four hundred feet in width granted by the United States to the Central PacificRailroad Company by the act of July 1, 1862, through the public lands of the United States in California, as a right of way upon which to construct and operate a railroad from the Pacific Ocean eastward to connect with the Union Pacific Railroad to be built westward from the Missouri River. The act of Congress also granted to each of the said railroad companies the odd-numbered sections of land lying within ten miles of the part of the line built by it. (12 U.S. Stats. 489.) In 1864 the Central Pacific Railroad Company assigned its rights and holdings under said act of Congress to the Western Pacific Railroad Company. On June 8, 1867, it made a contract with one McLaughlin to sell to him the west half of section 23 and the northwest quarter of section 27, at the rate of five dollars per acre. McLaughlin, on April 14, 1868, assigned to Droge, the defendant, the right to purchase the said land under said contract. Droge had entered into possession of the lands in 1867. In the year 1868 the Western Pacific Railroad Company constructed the contemplated railroad across said sections 23 and 27, and built fences on each side of its railroad at the distance of fifty feet from the center line thereof, thereby inclosing a strip of land one hundred feet wide extending through the said sections. These fences have ever since remained as thus located. The railroad company has never exercised any acts of ownership over the remaining portions of the four hundred foot strip. The defendant Droge, upon the erection of said fences, remained in possession of that part of the four hundred foot strip lying outside of said fences. He has ever since held possession thereof, has inclosed the same by connecting other fences with the aforesaid railroad fences and has improved and cultivated the same. The land sought to be recovered in this action embraces the strips of land one hundred and fifty feet in width lying within the subdivisions above mentioned and between the said railroad fences and the exterior lines of the four hundred foot strip aforesaid.

The complaint is in the ordinary form of a cause of action to recover possession of real property. The answer denies the ownership by the plaintiff, and as an affirmative defense alleges that the defendant has held possession of the land adversely, under claim of title, and uninterruptedly, for forty-one years next before the beginning of the action, that he has paid the taxes thereon during all of said period, and that the action is barred by statute of limitations. An estoppel is also alleged in defense, the particulars of which will hereafter be more particularly stated.

1. The appellant's first point is that the plaintiff failed to prove its alleged title to the land. In June, 1870, after the making of the contract to sell these lands to McLaughlin, the Western Pacific Railroad Company and the Central PacificRailroad Company, with the approval of Congress, consolidated under the name of the Central Pacific Railroad Company. The plaintiff, the Central Pacific Railway Company, was incorporated on July 29, 1899, under the laws of the state of Utah. In order to establish a chain of title to the lands in controversy it was necessary for the plaintiff to prove a transfer to it by the Central Pacific Railroad Company. In proof of this the plaintiff offered in evidence miscellaneous record "G" of the records of San Joaquin County, containing what purported to be the record of a deed of the Central Pacific Railroad Company conveying these lands to the Central Pacific Railway Company, duly executed and acknowledged. The defendant objected to this on the ground that the record was not competent evidence of the contents of the deed or of its execution, for the reason that the miscellaneous record was not a proper record book in which to record deeds. The court overruled the objection and admitted the deed in evidence.

Section 1951 of the Code of Civil Procedure provides that the original record of a deed properly acknowledged may be read in evidence to prove the contents of the deed, with like effect as the deed itself and without further proof. In Cady v. Purser,131 Cal. 552, [82 Am. St. Rep. 391, 63 P. 844], the court held that the record of a mortgage in a book other than the mortgage record does not give constructive notice to a subsequent purchaser, the reason being that such mortgage is not "recorded as prescribed by law," within the meaning of section 1213 of the Civil Code, making instruments so recorded constructive notice to subsequent purchasers. This decision casts some doubt upon the admissibility of said miscellaneous record as evidence of the contents of the deed. After that decision the legislature enacted section 4135a of the Political Code declaring that if an instrument is recorded in the wrong book, but is indexed in the proper index, the record of the instrument, though in the wrong book, is constructive notice of its contents from and after the time it is properly indexed. The effect of this section would probably be that the record of an instrument in the wrong book, if it is properly indexed, would be competent evidence of the contents of the instrument. The plaintiff did not offer any proof that it was properly indexed and we cannot sustain the ruling of the court upon that ground. We deem it unnecessary to determine whether or not the miscellaneous record was competent evidence. There was other evidence sufficient to sustain the finding that the plaintiff company had acquired title from the Central Pacific Railroad Company prior to the beginning of the action. It appeared from numerous references and statements made during the trial that the plaintiff had been in possession of the one hundred foot strip fenced by the Western Pacific Railroad Company and had been operating the railroad thereon for several years before the beginning of the action. It was practically conceded that the plaintiff had in some manner acquired lawful possession of the railroad and of the one hundred foot strip before the action was begun. In Northern Pac. Ry. v. Townsend,190 U.S. 267, [47 L. Ed. 1044, 190 Sup. Ct. Rep. 267], the supreme court of the United States decided that the grant of a four hundred foot strip of land to that company as a right of way for a transcontinental railroad to be built thereon was a conclusive determination by the United States that the entire strip granted was necessary for that purpose and that the grantee had no power to alienate or dispose of any part of it for any other purpose. The terms of the grant in this case are in effect the same as those of the grant considered in that case. The principle there stated applies with equal force to the present case. The fact that plaintiff had in some manner obtained possession of this part of the right of way, and of the railroad, and was using and operating the same, created an inference that it had acquired the right to both from the former owner and, under the decision above mentioned, this would carry the corresponding right to the strip four hundred feet wide, since the railroad company could not lawfully separate a part from the whole. In addition to this evidence the parties to the action made and put in evidence a stipulation declaring that, pursuant to section 3664 of the Political Code, statements describing the franchise, roadbed, rails, and rolling stock of this railroad had been furnished to the state board of equalization each year from 1880 to 1910 by "plaintiff's predecessor in title Central Pacific Railroad Company and plaintiff," and that these statements described "the right of way or roadway of said Central PacificRailroad Company and of plaintiff" as being one hundred feet in width. This is a direct admission that the plaintiff had succeeded to the title of the Central Pacific Railroad Company to the railroad and to the right of way therefor to the extent of one hundred feet. Under the decision in the Northern Pacific case, aforesaid, the Central Pacific Railroad Company could not, without the consent of Congress, alienate or dispose of the right of way or any part thereof except in connection with and as a part of a transfer of its railroad and for railroad purposes. It follows that a transfer of the railroad from one company to another, as its successor in the administration of the public use and for the purpose of continuing the operation thereof, would carry with it a transfer of the entire right of way and give to the transferee the right of possession thereto. These circumstances and this evidence were sufficient to support the finding that the plaintiff had acquired title to the property. There was no evidence to show that the plaintiff had not acquired the title of the Central Pacific Railroad Company. The objection was purely technical. In view of the other evidence of title we can not hold that the ruling admitting the record in evidence, even if erroneous, was substantially prejudicial to the appellant.

2. The defendant claims that he has acquired title by prescription to the one hundred and fifty foot strips in dispute. The court found that, for more than forty-one years immediately before the action was begun, Droge had openly, notoriously, exclusively, uninterruptedly, and continuously occupied and cultivated these parcels, and that he had, during that time, paid all taxes thereon, but that his possession was not adverse "to the plaintiff or its predecessors in title under a claim of title exclusive of any other right." The evidence showed without conflict that defendant had, in fact, during all this period, claimed title to the land, and that his possession was, in fact, hostile to the plaintiff and its predecessors in interest. The finding that the defendant was not holding adversely would be contrary to these undisputed facts, if the land were held in ordinary ownership. This part of the finding was evidently a conclusion of law based upon the theory that there can be no effectual adverse possession of a public way of this character. Thus considered the finding is correct. The grant of the right of way was made by the United States to the Central Pacific Railroad Company. The supreme court of the United States has established the rule that "the courts of the United States will construe the grants of the general government without reference to the rules of construction adopted by the states for their grants." (Packer v. Bird, 137 U.S. 669, [34 L. Ed. 819, 11 Sup. Ct. Rep. 210];Shively v. Bowlby, 152 U.S. 44, [38 L. Ed. 331, 14 Sup. Ct. Rep. 548]; Northern Pac. Ry. v. Townsend, 190 U.S. 267, [47 L. Ed. 1044, 23 Sup. Ct. Rep. 671].) The effect of the grant in question must, therefore, be determined in accordance with the decisions of the federal courts. In the last-named case the court declared the rule to be that the estate granted in the strip designated as a right of way by this act of Congress was an estate in fee for a special public purpose, subject only to reverter at the instance of the United States if the public use was not properly maintained, that the railroad company could not alienate any part of the right of way so as to interfere with the full exercise of the franchise granted, and that the grant, as above stated, was a conclusive determination that the entire four hundred foot strip was necessary for the public purpose for which it was granted. Referring to the claim of Townsend to a title by prescription, the court said "it is evident that to give such efficacy to a statute of limitations of a state as would operate to confer a permanent right of possession to any portion thereof upon an individual for his private use, would be to allow that to be done by indirection which could not be done directly," and that "the possession by individuals of portions of the right of way can not be treated, without overthrowing the act of Congress, as forming the basis of an adverse possession which may ripen into a good title as against the railroad company." See, also, to the same effect,Southern Pac. Co. v. Hyatt, 132 Cal. 240, [54 L. Ed. 522,64 P. 272]; Southern Pac. Co. v. Burr, 86 Cal. 279, [24 P. 1032]. It is a familiar rule in this state that title to a public way cannot be gained by adverse possession, no matter how long continued. Our decisions on the subject are cited inPatton v. City of Los Angeles, 169 Cal. 521, [147 P. 143]. Under these authorities it is clear that the defendant's claim of title by adverse possession can not be sustained.

The decision in Northern Pac. Ry. v. Townsend, 190 U.S. 267, [47 L. Ed. 1044, 23 Sup. Ct. Rep. 671] disposes of the claim that the evidence does not show that the entire four hundred feet was necessary for the public use. The grant itself adjudicates the fact that it is all necessary.

There is no force in the claim that the act of Congress of June 24, 1912, purporting to allow prescription in such portion of the right of way granted to the Union Pacific Railroad as should be in the adverse possession of individuals long enough to acquire title by prescription under the state laws, and granting the same to persons thus in possession, is effective to perfect the title of the defendant to these parcels of land. It is true that the grant to the Central PacificRailroad Company was made by the act which also contained the grant to the Union Pacific Railroad Company, mentioned in the act of June 24, 1912, and that the grant to the Central PacificRailroad Company was declared to be upon "the same terms and conditions" as that to the Union Pacific Railroad Company. But the act of 1912 is specifically made applicable to the grant to the Union Pacific Railroad Company. It could not be extended by implication to the right of way granted to the Central PacificRailroad Company. Moreover, it is held by the supreme court of the United States that the act of 1912 is not retroactive, that the statute of limitations of a state did not begin to run as to such lands until its passage and that "possession prior to the statute had no effect on the title." (Union Pac. R. R. v. Laramie, 231 U.S. 196, [58 L. Ed. 179, 34 Sup. Ct. Rep. 101];Union Pac. R. R. v. Snow, 231 U.S. 204, [58 L. Ed. 184, 34 Sup. Ct. Rep. 104].)

3. The further claim is made that the grant of this four hundred foot right of way was subject to the police powers of the state and that the law of this state, authorizing a railroad company "to lay out its road not exceeding nine rods wide" (Stats. 1861, p. 615, sec. 16, subd. 4) operated to divest the railroad company of that part of the four hundred foot strip lying more than four and one-half rods from the center line of its railroad, or, at least, to destroy the public use in that portion thereof so as to make it subject to acquisition by adverse possession. It was declared inNorthern Pac. Ry. v. Townsend, 190 U.S. 267, [47 L. Ed. 1044, 23 Sup. Ct. Rep. 671], that the grant by the United States to the railroad company was subject to the police powers of the state, and as an instance of such power it referred to the right of the state to require the railroad company to allow public crossings of the right of way at the intersection of public highways. Unquestionably this is correct, but it does not warrant the extension of the doctrine far enough to permit the state to partially destroy the public use or make any limitation on the width of the right of way declared to be necessary by the act of Congress. The railroad to be built over this right of way was a transcontinental road operating through several states and in furtherance of interstate commerce, a subject over which the federal authority is paramount. The state cannot impair or restrict the public way declared necessary by the United States for that purpose by any attempt to limit the width of the right of way established by Congress over the public lands of the United States. To the proposition that the parcels in question have been forfeited by reason of nonuser, it need only be said that under the doctrine of Northern Pac. Ry. v. Townsend,190 U.S. 267, [47 L. Ed. 1044, 23 Sup. Ct. Rep. 671], there could be no forfeiture without the consent of Congress, and there has been no consent.

4. It is next claimed that the plaintiff is estopped from asserting title to the parcels in question. This supposed estoppel is based upon the fact that the defendant paid for the subdivisions of land, which included the right of way in question, at the rate of five dollars an acre, computed on the entire acreage of said subdivisions, and that he has improved and cultivated the land during the forty-one years of his possession thereof. The evidence shows that the defendant, at the time he purchased the land, was aware of the act of Congress by which the right of way along the railroad line was granted and that he paid the price stated with full knowledge thereof. It being a public statute he would be presumed to have full knowledge thereof, even if he had no actual knowledge. He made the final payment of $3.75 per acre after the railroad was in full operation. An estoppel does not arise solely by reason of the payment of money as the price of property to be granted therefor, where the payment is made with full knowledge of the fact that the proposed grant will carry title only to a part of the tract described. In such a case the party claiming the estoppel knows the true state of the title and no estoppel is created. (Boggs v. Merced M. Co., 14 Cal. 368.) Furthermore, the estoppel here claimed would operate to discontinue a public use, to divest a title which the company could not alienate or dispose of directly or indirectly. If, as we have seen, title by prescription, through the neglect or tolerance of the company in charge of the use, cannot be gained, it must follow that it cannot divest itself thereof through the medium of such an estoppel. The only improvement made upon the land consisted of leveling to make it fit for cultivation and more productive. Afterward, the defendant held possession of the land and obtained the entire profit thereof for many years. As he could not claim title by estoppel created by the payment of the price alone, no equitable considerations arise from these improvements, since it must be apparent that the profit he obtained more than equaled the expenses of the improvement made. We find no ground on which to sustain the defense of estoppel.

We find no other points that require notice. The appeal cannot be sustained.

The judgment and order are affirmed.

Sloss, J., Melvin, J., Lorigan J., Lawlor, J., and Angellotti, C. J., concurred.