City of Oakland v. Carpentier (1863) · DecisionDepot
City of Oakland v. Carpentier
California Supreme Court Jul 1, 1863Published
Before: Field
Synopsis
A complaint in equity, filed for the purpose of setting aside a grant, on the ground that it was obtained by fraud, must state specifically and definitely the facts constituting the fraud.
The validity of a public act of the Legislature is in no respect impaired by the knowledge or ignorance at the time of the action of the Legislature in passing it on the part of the parties who may be affected by its operation.
A municipal corporation cannot invoke the aid of a Conrt of Equity to set aside a grant made by its authorities when the grant is void. Such a grant, being a nullity, casts no cloud upon the title of the corporation, and offers no embarrassment to the exercise of its legitimate functions.
Where the Board of Trustees of a municipal corporation makes a grant of its franchises and lands which is not void, but only voidable, the corporation cannot obtain the aid of a Court of Equity to set aside the grant without doing equity—that is, without tendering compensation to the grantee for the expenditures which he may have incurred under the grant, relying upon its validity.
The Trustees of the town of Oakland, in 1852, by ordinance, granted to the defendant, H. W. Carpentier, certain franchises and lands, on condition that the grantee should erect certain wharves and other improvements, and pay to the town a certain per centage of the wharfage received. In 1853 the Board of Trustees ratified and confirmed the ordinance. In 1857, and after Carpentier, supposing the grant to be valid, had made expenditures in erecting the wharves and improvements required by the ordinance, the city of Oakland, the corporation which had succeeded to the rights and interests of the town of Oakland, commenced suit for the purpose of having the grant set aside, on the ground that it was obtained by fraud, and constituted a cloud on the city’s title: Held, that if the ordinances granting the franchises and lands were void, there was no occasion for the interference of equity; that if they were only voidable, its interference could not be invoked until equity was done by the city, by placing, or offering to place, the grantee, who had relied upon the acts of the agents of the town, in the same position which he would have occupied but for his reliance upon their validity.
Field, C. J. delivered the opinion of the Court Cope, J. and Norton, J. concurring.
By an act of the Legislature, passed May 4th, 1852, the town [663]of Oakland was created a municipal corporation, the corporate powers being vested in a Board of Trustees, consisting of five members, to be elected on the second Monday of May of each year. By the third section of the act the Trustees were clothed with certain powers in relation to wharves, piers, and docks; and with a view to facilitate the construction of wharves and other improvements, the town was invested with the title to lands within the corporate limits lying between high tide and the ship channel of the bay of San Erancisco. On the second Monday of the same month, pursuant to the act of incorporation, an election was held, and five Trustees were chosen. Of these only four ever qualified; and at a meeting of the Trustees, consisting of this number, an ordinance was passed granting, in its first section, to the defendant, Horace W. Carpentier, and his legal representatives, for the period of thirty-seven years, the exclusive right and privilege of constructing wharves, piers, and docks, at any points within the corporate limits of the town, with the right of collecting wharfage and dock-age at such rates as he might deem reasonable, subject to certain provisions as to the erection of particular wharves, and the payment to the town of a certain per centage of the receipts of the wharf-age ; and granting to him, in its second section, with a view, as expressed therein, the more speedily to carry out the intentions and purposes of the act of incorporation, and in consideration of a contract on his part to build a public school-house for the town, all the land lying within the corporate limits between high tide and the ship channel. The ordinance also charged the President of the Board of Trustees with the duty of executing, on behalf of the town, a grant or conveyance to Carpentier, in accordance with its provisions. Under this ordinance the President executed to Carpentier the grant or conveyance designated, reciting in the instrument the authority under which he acted.
In May, 1853, at the second election under the act of incorporation, five Trustees were again elected, and of them also only four ever qualified. The Board, consisting of the four who qualified, by an ordinance, passed in August, 1853, ratified and confirmed the ordinance of the previous Board, reciting that the consideration, upon which such previous ordinance had been passed, had been “ in [664]
chief satisfactorily paid and performed,” and also regranted to Carpentier and his legal representatives the water front of the town, with the right to erect wharves, piers, and docks, and buildings, at any and all points thereon not obstructing navigation.
By an act of the Legislature, passed March 25th, 1854, a municipal corporation by the name of the “ City of Oakland ” was created, and invested with all the rights, claims, and .privileges, and subjected to all the obligations and liabilities of the “ Town of Oakland.” The present suit is brought by the new corporation, and its object is to set aside and cancel the grant or conveyance to Carpentier, and enforce a surrender of the interests and property transferred or claimed to be transferred thereby.
The suit is, of course, for equitable relief, and the grounds alleged for the interposition of equity are that the grant or conveyance was obtained by fraud on the part of Carpentier, and was made without authority on the part of the Trustees, and that it constitutes a cloud upon the title of the city, and embarrasses her in the exercise of her legitimate functions.
The fraud alleged is that Carpentier obtained the act incorporating the town of Oakland without the consent or knowledge of the people of the town, and for the purpose of acquiring the franchises and lands subsequently granted to him; that at the election held under the act of incorporation he procured the election of himself and “ partners in land speculations ” as members of the Board of Trustees, and declined to qualify himself, in order to remove a legal obstacle to his obtaining the grant in question; and that the conveyance to Mm by the President of the Board was, according to an understanding with the Board, to be executed upon the delivery of a bond to reconvey the franchises and lands to the town when requested, but that it was obtained without such bond, upon representations that it was important to the interests of the town that it should be executed at once, in order to be filed before the Board of Land Commissioners, then in session, and that he would give the bond at some future period. Ho matters are stated in support of the allegation that he “ fraudulently procured the election of Ms tools and agents” in the year 1853, when the confirmation of the ordinance was obtained. It is very evident that the matters thus [665]alleged, in order to taint and vitiate the ordinances of the Board of Trustees and defeat the grant to Carpentier, are on their face too vague and general to merit serious consideration. It is of no consequence whether the act of incorporation was procured with or without the knowledge of the people of Oakland. The validity of the public acts of the Legislature is in no respect impaired by the knowledge or ignorance of the parties who may be affected by their operation. And the general charges referring to the election of members of the Board of 1852 and of 1853, so far as the complaint is concerned, rest in mere averment. And in relation to the bond for reconveyance, which it is alleged Carpentier, by an understanding with the Board, was to execute, it is sufficient to observe that the ordinance itself, to which the complaint refers, negatives any understanding of the kind. The allegations of the complaint are, as a whole, of so vague and indefinite a character that no relief can be based thereon. When the case was here upon the demurrer to the complaint, the Court observed that the alleged fraudulent practices of Carpentier, in procuring the election of the first, or of the second Board, or the promises or agreements made to induce the execution and delivery of the conveyance from the President, were not fully set out; but as the complaint might be amended on the return of the cause in these particulars, it proceeded to consider the general questions discussed by counsel. It is sufficient to say that the complaint was not amended; and aside from this consideration, the answer fully meets and denies the charges of fraud or fraudulent intent in the acts of Carpentier; and what is of more consequence, the charges are wholly unsustained by the proofs.
Stripped of the charges of fraud the whole claim for equitable relief falls to the ground. The grant was either valid, or void, or voidable. If void, as contended by the counsel of the respondent, there can be no occasion for the interference of a Court of Equity. If void, the condition of things—of the rights, privileges, and estate of the city—remains as though no transfer had been attempted. Ho cloud is cast upon her title, and no embarrassment can attend the exercise of her legitimate functions. She has only to proceed and assert her privileges and claim her interests, and whoever interferes with them will be a trespasser. If, however, the grant [666]is only voidable, and not void, the plaintiff seeking the aid of a Court of Equity can only obtain equity by doing equity—that is, she can only obtain relief from the acts of the agents of the town, by tendering compensation to the defendant, who has relied upon them, for his expenditures. One of the counsel of the plaintiff, in a brief, exhibiting ability and learning, takes the same position in answer to the defendant, who urges this principle against the relief prayed. “The principle invoked,” says the counsel, “is not applicable to a case like the present. It is a rule only in cases where a plaintiff is in Court seeking to set aside some act or contract voidable, but not void, as. for fraud, mistake, etc.; or to rid himself of a liability, otherwise valid, upon a ground which is against good conscience, and not favorably regarded in equity, as usury, gaming, etc. Here our case is that there never was a grant, contract, or act, of any sort, on the part of the town, whatever might have been attempted by her unfaithful agents. As already remarked, she was an artificial being, endowed by the law of her creation and existence with certain limited powers and functions, and utterly incapable of acting or even of being beyond or against these, to any intent or purpose whatever.”
The conclusion which follows from the views we have expressed is evident. The charges of fraud, as a ground for the equitable interposition of the Court, are fully answered, and must be left out of the case. If the ordinances of the Board, granting the franchises and lands to Carpentier, are void, there is no occasion for the interference of equity. If they are only voidable, that interference cannot be invoked until equity is done by the party claiming it—that is, by placing or offering to place the party relying upon the acts of the agents of the town in the same position which he would have occupied but for his rebanee upon their validity. These views dispose of the case, and render it unnecessary to consider the other points made by the appellants.
The judgment of the Court below must therefore be reversed, and that Court directed to dismiss the suit, and it is so ordered.
[667]The plaintiff filed a petition for a rehearing, upon which Norton, J. delivered the opinion of the Court—Cope, C. J.* concurring.
The plaintiff asks a rehearing in this case, upon the ground that when the case was before this Court on a former occasion it was decided: first, that the action could be sustained without an offer by the plaintiff to do equity ; and, second, that although the transfer to the defendant was void, it was a proper case to ask the transfer to be set aside by the equity powers of the Court, and that these decisions have become the law of the case, and cannot now be reversed.
In the former decision the complaint was held to be sufficient, upon the ground that the transfer was absolutely void. Nothing was said as to whether it would have been sufficient without an offer to do equity, if the Court had considered the transfer not void, but only voidable. Afterwards the opinion was modified, by reserving for future revision the question of the validity of the contract with Carpentier. This was a reservation of the whole question as to its validity, as well whether it was voidable as whether it was void. The question whether or not the transfer was voidable being thus withdrawn, no decision can be inferred as to what would have been necessary to render the complaint sufficient, in case the Court should consider the transfer only voidable.
It may be argued that when this question was "withdrawn from the opinion, there was no ground specified in the opinion upon which the decision was made; but if this may be so, it does not follow that the decision necessarily involves a determination of a question which was not only not mentioned, but the basis for which was withdrawn from the opinion; and so, although it was said in that opinion that it was a proper case for equitable relief, considering the transfer absolutely void, yet when the ruling that the transfer was void was withdrawn from the opinion, the remark that it was a proper case for equitable relief became merely obiter, and [668]decided nothing. At most, it could be considered as only saying what would be the opinion of the Court in case, upon a revision of the question on some future occasion, the Court should hold the transfer void.
Rehearing denied.
Mr. Field having been appointed an -Associate Justice of the Supreme Court of the United States resigned the office of Chief Justice May 20th, 1863. Mr. Cope succeeded him as Chief Justice. The opinion on the rehearing was not filed until June following.
AI Brief
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Holding. The court held that allegations of fraud were unsupported by proof and that the city failed to state a valid claim for equitable relief, as the challenged ordinances were either void—precluding the need for equitable intervention—or voidable, requiring the city to do equity by compensating the defendant.
Issues
Whether the city's allegations of fraud were sufficient to warrant equitable relief.
Whether a court of equity should intervene to set aside a municipal grant that is either void or voidable.
Whether a party seeking to set aside a voidable municipal grant must offer compensation for expenditures made in reliance on that grant.
Disposition. reversed
Quotations verified verbatim against the opinion
“Stripped of the charges of fraud the whole claim for equitable relief falls to the ground.”
“If void, as contended by the counsel of the respondent, there can be no occasion for the interference of a Court of Equity.”