Wilson v. Beville

• Decision Date: 21 November 1955
• Citation: 290 P.2d 70
• Court: California Court of Appeals Court of Appeals
• Parties: H. J. WILSON, Plaintiff and Appellant. v. Charles H. BEVILLE, City of Los Angeles, et al., Defendants. City of Los Angeles, Defendant and Respondent.* Civ. 20995.

Page 70

290 P.2d 70

H. J. WILSON, Plaintiff and Appellant. v. Charles H. BEVILLE, City of Los Angeles, et al., Defendants.

City of Los Angeles, Defendant and Respondent.*

Civ. 20995.

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

Nov. 21, 1955.

Rehearing Denied Dec. 12, 1955.

Hearing Granted Jan. 18, 1956.

Guerin & Guerin, Los Angeles, for appellant.

Roger Arnebergh, City Atty., Peyton H. Moore, Jr., Chief Deputy City Atty., Spencer L. Halverson, Deputy City Atty., Los Angeles, for respondent.

ASHBURN, Justice pro tem.

Action to quiet title and for ejectment. Plaintiff claims title by virtue of a city treasurer's deed issued to his predecessor in interest after foreclosure sale under a street improvement bond issued pursuant to Improvement Act of 1911 (now secs. 5000-6794, Streets and Highways Code). The assessment resulting in this bond was levied under said Act of 1911 and recorded on November 23, 1927. On November 25, 1927, two days later, the city of Los Angeles commenced a condemnation action entitled City of Los Angeles v. Howse, in which it took an easement for street purposes (south La Brea Avenue) across part of the land upon which the street bond constituted a lien. The owner of that lien (who at that time would be the contractor) was not joined as a defendant, nor was he or any holder of the bond ever brought into the action. That fact gives rise to the primary question in this case.

The assessment was recorded on November 23, 1927, the action was filed on November 25, 1927, the bond was issued under said Act of 1911 on December 28, 1927, to Municipal Bond Company. A certificate of a treasurer's sale was issued to one Al Schuh on October 19, 1938, same was transferred on March 8, 1950 to Betty Wilson. The amount set forth in the notice to redeem was $295.06, but should have been $309.41. The treasurer's deed was issued to Betty Wilson on August 23, 1950. She quitclaimed to plaintiff on April 12, 1951, and he filed this action on the following day.

Final judgment of condemnation was entered on July 23, 1931, and the record owner of the portion condemned was awarded and paid the sum of $5,376.20. The city took possession of the condemned property on January 22, 1932, and forthwith devoted it to public use as a part of a city street. No portion of the assessment or bond has been paid.

The court rendered judgment that plaintiff is the owner of the condemned parcel subject to the city's street easement. Plaintiff appeals from the judgment claiming that the city acquired title subject to the lien of his bond, that that lien ripened into a fee title in plaintiff and, alternatively, that the city should have been required by way of inverse condemnation to pay to the plaintiff the amount previously awarded and paid to the record owner, not merely the amount of plaintiff's bond. The city, as respondent, contends first, that the lien of the bond was transferred by the condemnation to the award made in that action regardless of nonjoinder of the lien holder, and that his remedy was to appear and assert his rights in the eminent domain case or to collect the amount of the bond from the owner who received the award.

The question of whether a tax or assessment lien is lifted from the land and transferred to the condemnation award regardless of nonjoinder of the holder of the lien has not been definitely answered in this state. ¹ The general proposition that a lien, whether it be a mortgage, trust deed or tax lien, attaches to the award and is removed from the condemned land, has been stated from time to time in this jurisdiction. Pomona College v. Dunn, 7 Cal.App.2d 227, 232, 46 P.2d 270; Rose v. Conlin, 52 Cal.App. 225, 230, 198 P. 653; Los Angeles Trust & Savings Bank v. Bortenstein, 47 Cal.App. 421, 423, 190 P. 850. Certainly that is the result when the award is on deposit in the court. Board of Capitol Managers v. Brasie, 72 Colo. 153, 210 P. 63; United States v. Cohen, D.C., 81 F.Supp. 340; United States v. 909.30 Acres of Land, etc., D.C., 114 F.Supp. 756; United States v. Certain Parcels of Land, D.C., 44 F.Supp. 936; Weber v. Wells, 9 Cir., 154 F.2d 1004. But none of the cases just cited (those in California or other jurisdictions) involves the point here presented--the right of a lien holder who has not been joined as a defendant and who has received no part of the award, same having been paid to the owner of the fee.

In California a condemnation action is not strictly one in rem, it is quasi in rem. Harrington v. Superior Court, 194 Cal. 185, 189, 228 P. 15; 18 Cal.jur.2d sec. 257, p. 10. An examination of the statute discloses that it is contemplated that al persons in interest, which of course includes lien holders, must be joined as defendants where their rights are known or appear of record.

Code of Civil Procedure, sec. 1244, states the requirements of the complaint and subdivision 2 says it must include: 'The names of all owners and claimants, of the property, if known, or a statement that they are unknown, who must be styled defendants'. Of course this means they must be joined. The first sentence of sec. 1245.3 contains this: 'In any action brought under this title the plaintiff may name as defendants, in addition to those persons who appear of record or are known to plaintiff to have or claim an interest in the property, 'all persons unknown claiming any title or interest in or to the property,' naming them in that manner * * *.' ² Section 1246 requires each defendant to set forth his estate or interest in the property described and the amount of damages claimed by him. It also says: 'All persons in occupation of, or having or claiming an interest in any of the property described in the complaint, or in the damages for the taking thereof, though not named, may appear, plead, and defend, each in respect to his own property or interest, or that claimed by him, in like manner as if named in the complaint.' Section 1248 requires the court or jury to fix the value of the property sought to be condemned, 'and of each and every separate estate or interest therein; if it consists of different parcels, the value of each parcel and each estate or interest therein shall be separately assessed'. (This is not affected by sec. 1246.1 which was not enacted until after the proceedings now under discussion.) Section 1252 provides that: 'Payment may be made to the defendants entitled thereto, or the money may be deposited in Court for the defendants, and be distributed to those entitled thereto.' And sec. 1248, subd. 8: 'When the property sought to be taken is encumbered by a mortgage or other lien, and the indebtedness secured thereby is not due at the time of the entry of the judgment, the amount of such indebtedness may be, at the option of the plaintiff, deducted from the judgment, and the lien of the mortgage or other lien shall be continued until such indebtedness is paid.' ³ The last quoted subsection has been held to apply not only to voluntary liens but also street assessment and similar involuntary liens. City of Los Angeles v. Superior Court, 2 Cal.2d 138, 140, 39 P.2d 401. There is nothing in these statutory provisions to indicate any legislative recognition of a right to dispose of any lien upon property involved in an eminent domain proceeding without making the owner thereof a party and giving him an opportunity to be heard, not unless his claim is unknown and does not appear of record.

The case last cited, City of Los Angeles v. Superior Court, supra, was an action in eminent domain. Between the time of filing the complaint and the making of interlocutory judgment, assessments for street improvements became liens upon the property. The same not being due at the time of judgment, the city withheld the amount thereof and tendered the balance of the money to the owner of the fee, who refused to accept it. Thereupon the city brought an action in mandamus to compel him to fully satisfy the judgment upon receipt of the said money. The court first disposed of the contention that the terms of sec. 1248, subd. 8 do not include involuntary liens, such as a street assessment, and then explained the purpose of that subdivision as follows: 'The purpose of the statute is obviously to prevent a situation wherein the condemnor will pay the full value of the land, and thereafter will be forced to pay again to holders of liens on the land, when the liens become due. Bearing this purpose in mind, it certainly makes no difference whether the lien was created by the owner, as in the case of a mortgage, or arose in other ways.' 2 Cal.2d at page 140, 39 P.2d 401. The court relied somewhat upon Marin Municipal Water Dist. v. North Coast Water Co., 40 Cal.App. 260, 180 P. 620.

In that instance plaintiff water company had condemned land of defendant in a previous action; shortly before the interlocutory judgment was entered city and county taxes became a lien thereon; later, an order for possession was made and possession taken upon payment of the award to the defendant; the taxes were then due and were a lien upon the land but were not in default. 40 Cal.App. at page 262, 180 P. 620. Plaintiff later redeemed the premises from a tax sale and then sued defendant to recover the amount it had paid for that purpose. Judgment for defendant was affirmed, the court saying, 40 Cal.App. on page 262, 180 P. on page 621, relative to sec. 1248, subd. 8: 'It gives to the person taking property by proceedings in eminent domain the right to retain from the sum of money to be paid for it the amount necessary to discharge any lien existing thereon, but his neglect to adopt this course would not give rise, in the absence of some other provision of law creating it, to a right of action to recover it when once paid. The right given by this section seems to be one the extent of which is measured by the mode prescribed for its exercise. In eminent domain proceedings the only obligation resting upon the...