People By and Through Department of Public Works v. Peninsula Title Guaranty Co.

• Decision Date: 31 August 1956
• Citation: 47 Cal.2d 29,301 P.2d 1
• Parties: PEOPLE of the State of California, acting by and through the DEPARTMENT OF PUBLIC WORKS, Plaintiff, v. PENINSULA TITLE GUARANTY COMPANY, a corporation, Defendant, Arthur Bros., a partnership composed of James H. Arthur and Noel L. Arthur, Defendant and Appellant, and City of San Mateo, a municipal corporation, Defendant and Respondent. S. F. 19128.
• Court: California Supreme Court

Page 1

301 P.2d 1

47 Cal.2d 29

PEOPLE of the State of California, acting by and through the DEPARTMENT OF PUBLIC WORKS, Plaintiff, v. PENINSULA TITLE GUARANTY COMPANY, a corporation, Defendant Arthur Bros., a partnership composed of James H. Arthur and Noel L. Arthur, Defendant and Appellant and City of San Mateo, a municipal corporation, Defendant and Respondent.

S. F. 19128.

Supreme Court of California, In Bank.

Aug. 31, 1956.

Schofield, Hanson & Jenkins, Thomas M. Jenkins, San Francisco, for appellant.

Arthur J. Harzfeld, City Atty., Frank W. Rose, Asst. City Atty., San Matco, for respondent.

SHENK, Justice.

In this proceeding in eminent domain the state acquired for highway purposes a parcel of land in the City of San Mateo which had been owned by the defendants James H. and Noel L. Arthur. The judgment awarded $25,500 to the Arthurs and to the tax collector of the City of San Mateo 'as their interests may appear.' The state paid the full amount into court. Subsequently the court ordered that $612.20 be paid from this fund to the city to satisfy a claimed assessment lien against the property. From this order the Arthurs have appealed.

The proceeding which culminated in the assessment lien asserted against the Arthurs' property was commenced by the City of San Mateo in January, 1952, pursuant to the Municipal Improvement Act of 1913, Str. & H. Code, § 10,000 et seq., for the purpose of completing a drainage project affecting and benefiting the lands involved. The assessment is a special benefit assessment in which the cost of the improvement is assessed against the parcels of property embraced within the district in accordance with the special benefit to each parcel.

A year after the initiation of the proceeding resulting in the assessment lien, the California Highway Commission, on January 21, 1953, adopted a resolution determining that the public interest and necessity required the acquisition of the Arthurs' property for highway purposes. The complaint in eminent domain was filed and summons was issued on April 20, 1953. Pursuant to the constitutional provision, art. 1, § 14, an order was made on that date authorizing the state to take immediate possession of the property. On June 21, 1953, the owners were required to vacate and the state commenced the removal of buildings and the construction of an overpass thereon. Thereafter, on August 19, 1953, the City of San Mateo recorded its special benefit assessment lien against the property. Trial of the cause in eminent domain was commenced on November 9, and judgment was entered on December 2, 1953. The value of the property was fixed as of the date of issuance of summons, April 20, 1953 (see Section 1249, Code Civ.Proc.).

The theory on which the trial court ordered payment of the city's assessment out of the award was that such an assessment is a levy on the interest of the owner; that title to the property does not pass in a condemnation proceeding until judgment is entered and recorded (§ 1253, Code Civ.Proc.); that the mere taking of possession of land prior to judgment pursuant to the provisions of article I, § 14 of the Constitution does not accelerate the passing of title; that the title was therefore in the Arthurs at the time the assessment was levied, and that the lien attached to the award in condemnation. See City of Los Angeles v. Superior Court, 2 Cal.2d 138, 39 P.2d 401.

The Arthurs do not claim that the foregoing theory is not supported by authority, but they asserts that the conclusion based thereon was never intended by the Constitution and other laws of this state and that a factual situation such as this has never been finally passed upon by its courts. They argue that to deprive them of all but a bare legal title to their property and thereafter to levy and require that they pay an assessment for benefits they can never enjoy out of an award based on the value of their property at the time of taking possession and before accrual of the benefit, is a taking without the just compensation required by article I, § 14 of our Constitution. They rely in part on City of Los Angeles v. Los Angeles Pacific Co., 31 Cal.App. 100, 116, 159 P. 992, 998, where the court, after reviewing cases in other jurisdictions, concluded that 'the defendants could not be charged with subsequent taxes against property which they had ceased to own.'

In situations where it can be said that in addition to a mere taking of possession by the condemner there is also such a substantial change in the status of the land taken and the condemnee's relation to it as to constitute, in effect, a divestiture for all practical purposes of all of the former owners' interest, the strict rule should not apply. People v. Klopstock, 24 Cal.2d 897, 151 P.2d 641; People v. Joerger, 12 Cal.App.2d 665, 55 P.2d 1269, 1272; 29 C.J.S., Eminent Domain, § 135, p. 966. In the Joerger case the court stated that in 'the ordinary proceeding the property is not 'taken' until the final decree is entered. Code Civ.Proc., § 1253. It is the divesting of the title of the owner and the vesting of the title in the condemnor which constitutes the 'taking' in such cases. But where, as under our Constitution, provision is made for a 'taking' prior to the divestiture of title, the party who owns the property at the time of such 'taking' is entitled to the compensation * * *. It thus appears that where there is no prior physical 'taking,' the property is deemed to have been 'taken' when title is divested, as possession follows the title. Where there has been a prior physical 'taking,' the subsequent divestiture of title is merely a confirmation of the original 'taking.' The effect of the constitutional amendment was merely to accelerate the 'taking.' To hold otherwise would, in effect, nullify that provision of the Constitution which provides that 'private property shall not be taken or damaged for public use without just compensation having been first made or paid into court for the owner."

This court also has held that the act of a condemner in entering into possession of private property and proceeding to commence construction thereon was a 'taking' of the property as that term is used in the constitutional provision here involved. Until the adoption of the constitutional amendment in 1918, article I, § 14 did not provide, as it does now, for an order whereby the condemner might enter into possession of the land prior to a judgment in condemnation. In 1897 the Legislature attempted to amend section 1254 of the Code of Civil Procedure to authorize such orders for possession pending trial of the cause. The constitutionality of the amended section was challenged in Steinhart v. Superior Court, 137 Cal. 575, 70 P. 629, 630, 59 L.R.A. 404. The question presented was whether taking possession and using the property during the pendency of the condemnation proceeding...