Trickey v. City of Long Beach

• Decision Date: 25 January 1951
• Citation: 101 Cal.App.2d 871,226 P.2d 694
• Parties: TRICKEY v. CITY OF LONG BEACH et al. Civ. 17733.
• Court: California Court of Appeals Court of Appeals

Page 694

226 P.2d 694

101 Cal.App.2d 871

TRICKEY v. CITY OF LONG BEACH et al.

Civ. 17733.

District Court of Appeal, Second District, Division 3, California.

Jan. 25, 1951.

Rehearing Denied Feb. 15, 1951.

Hearing Denied March 22, 1951.

Matot, Gabrielson & Manley and Harry B. Seelig, all of Los Angeles, Shinberg & Shinberg, Washington, D. C., for appellant.

Irving M. Smith, City Atty., Nowland M. Reid, Asst. City Atty., Atlee S. Arnold and Dewey L. Strickler, Deputy City Attys., all of Long Beach, for respondents.

VALLIE, Justice.

Appeal by petitioner from a judgment (denominated judgment and order) denying him and relief, entered on the hearing of an order to show cause for a preliminary injunction in an action for a writ of mandate and an injunction.

Petitioner, a taxpayer and resident of the city of Long Beach, filed a 'Petition For Writ of Mandate' against the city of Long Beach, the members of the City Council, the members of the Board of Harbor Commissioners, the City Treasurer, the City Auditor, the City Attorney, and two of his deputies, seeking, among other things, to compel them to 'cease' transferring funds from the city's 'Gas Revenue Fund' to its 'General Purpose Fund' and to retransfer funds from its 'General Purpose Fund' to the 'Gas Revenue Fund,' on the ground that they were trust funds which could be used only for harbor purposes and not for general municipal purposes.

The petition is predicated upon the decision in City of Long Beach v. Morse, 31 Cal.2d 254, 188 P.2d 17, 18, ¹ rendered December 30, 1947, which is made a part of the petition by reference. The petition alleges that after the rendition of the Morse decision the defendants 'conspired to divert and appropriate funds, the proceeds of said so-called tideland oil wells, of the City of Long Beach, in disregard of the rule announced in said decision, and ever since said time have continued and have pursued a policy of causing said public funds of the City of Long Beach to be diverted and appropriated in contravention of the law established by said decision in this, that the defendants, the Board of Harbor Commissioners of said City of Long Beach have caused the dry gas from tidelands to be turned over to the City Gas Department of the City of Long Beach and said gas has been sold at a profit to the citizens of the City of Long Beach, and the proceeds of the sale of this gas, which is part of the trust funds of said City, have been transferred from said Gas Department to the General Purpose Fund of the City of Long Beach at the following times and places [amounts], as follows, to-wit: January 31, 1948, the sum of $55,000; Junes 30, 1948, the sum of $23,500; Junes 30, 1948, the sum of $26,250.05; June 30, 1948, the sum of $2,850,000; June 30, 1949, the sum of $4,600,000'; that all such transfers of funds were done by resolution of the City Council of the City of Long Beach, concurred in by all the other defendants, notwithstanding the fact that defendants knew that they could not be used for general municipal purposes but were a trust fund for harbor purposes as determined by the Supreme Court in the Morse case; that the transfer of these funds 'was in violation of the terms of the trust under which the City of Long Beach holds title to the lands * * * and that the defendants * * * had no right, power or authority whatever to make said transfers and expenditures * * * and any orders or directions of said City Officials * * * purportedly authorizing said transfers and expenditures * * * was in violation of their oath of office and constitutes malfeasance on the part of the defendants * * *.'

The petition prayed that an alternative writ of mandate be issued requiring defendants to immediately 'desist' from transferring or diverting 'trust funds' into its 'General Purpose Fund' for general municipal purposes 'or for any purposes whatever excepting for harbor purposes in furtherance of the terms of the trust under which it holds title to certain tidelands which were the subject of the mandate proceedings' in the Morse case; to retransfer all funds heretofore paid into the 'Geneal Purpose Fund' and, in the event of any deficiency, to repay the amount which had been unlawfully transferred from the 'Gas Revenue Fund' until such time as the trust has been fully restored and 'all funds which properly belong to said trust fund placed in the proper fund and held exclusively for the purpose of said trust.' Although the petition is denominated one for writ of mandate, it is obvious that is seeks injunctive relief as well.

An order issued, requiring defendants to show cause why they should not be restrained from transferring from the 'Gas Revenue Fund' to the 'General Purpose Fund' 'monies derived from the proceeds or income from the tidelands,' to be used for general municipal purposes or any purposes except those set forth in the trust conveyance and under which the city holds title to the tidelands. Defendants filed a return to the order to show cause. The return, among other matters, challenged the legal capacity of the petitioner to maintain the action and the sufficiency of the petition, and alleged that there was another action pending between the same parties for the same cause. Attached were an affidavit of the superintendent of the Long Beach Municipal Gas Department and a specimen contract under which the city, through its Board of Harbor Commissioners, sells the natural gas derived from wells located on the tidelands and submerged lands and retains the 'resulting dry gas.'

The affidavit and the specimen contract reveal the following:

The Municipal Gas Department was created in 1923. The Municipal Gas System serves the entire area of the city of Long Beach with both domestic and industrial gas for fuel purposes. It is self-supporting, and the gas rate structure is maintained at a sufficiently high level to insure a substantial surplus profit. Since 1932 substantial sums of surplus moneys have been transferred from the Gas Department fund to other city funds to meet some of the general expenses of the city. The gas which the Municipal Gas Department distributes to its customers is obtained from several sources. Since 1939, the city has purchased 'considerable' gas from independent suppliers and, in addition, by virtue of various contracts entered into between it and purchasers of natural gas produced from wells located on city-owned land and from wells located on tidelands granted to the city by the state, it has had 'available' large quantities of dry gas. '[A]s of June 30, 1949, the City had the right to receive a quantity of dry gas equal to the resulting surplus dry gas derived from proceeding of the natural gas processed by the purchasers of the natural gas from 574 wells in the harbor area,' of which 506 are located on the tidelands.

Under its contracts for the sale of natural gas derived from wells located on the tidelands, the purchaser pays the city 62% of the 'gross proceeds derived * * * from the sale by it of natural gasoline, liquified gas and other products, excepting 'resulting dry gas." Under the contracts, ² the city elects to take all of the 'resulting dry gas' (which is that gas remaining after deducting unavoidable plant loss, unavoidable shrinkage, plant fuel reasonably used only in the collection of the natural gas and in the extraction of gasoline and other products from the natural gas, and the dry gas returned to the respective parcels from which the natural gas is recovered); in the event the city does not elect to take all, or any portion, of the 'resulting dry gas,' the purchaser is entitled to sell it and, as 'additional compensation for said natural gas purchased,' is required to pay the city therefor 75% of the total gross proceeds derived from the sale. Under the contracts, monthly written reports are required to be filed by the purchaser with the Board of Harbor Commissioners, showing the amount of natural gas received, the amount of natural gas sold and the proceeds derived from such sales, the propertion of gasoline extracted from the natural gas, the 'disposition of the total dry gas derived from the natural gas received by Purchaser from the wells on each of said parcels of land * * * (separately, by parcels),' and a statement of the total compensation, both in cash and in kind, due under the contract.

After hearing arguments on the order to show cause, the court entered a judgment reading in part, 'the Court * * * finds that an injunction and writ of mandate should not be granted for the reason that the case of City of Long Beach v. Morse, 31 Cal.2d 254, is not applicable to the relief sought herein and for the further reason that there is no another action pending entitled 'Albert v. Abrams et al. v. The City of Long Beach et al.,' in the Superior Court of the State of California, being case No. 546,583 in which the City of Long Beach is also a defendant and which seeks the same relief as that applied for herein. Therefore, the Writ of Mandate applied for by petitioner is denied, and the Court hereby concludes as a final judgment herein that petitioner is not entitled to the relief sought,' from which judgment petitioner appeals.

In the absence of a general demurrer in return to an order to show cause for a preliminary injunction, the question for decision on the hearing is whether, balancing the respective equities of the parties, the defendant should or should not be restrained pendente lite from exercising rights claimed by him. In such a case the granting or denial of a preliminary injunction does not amount to an adjudication of the ultimate rights in controversy. All questions decided on the hearing of the order to show cause are open for review on the final hearing. Marsh Bros. & Gardenier v. United States Fidelity & Guaranty Co., 97 Cal.App. 474, 478, 275 P. 886. Defendants did not demur to the complaint. In view of the fact that a final judgment was entered on the...