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CALIFORNIA v. SOUTHERN PACIFIC COMPANY.

decided: March 18, 1895.

CALIFORNIA
v.
SOUTHERN PACIFIC COMPANY.



ORIGINAL.

Author: Fuller

[ 157 U.S. Page 248]

 MR. CHIEF JUSTICE FULLER, after stating the case, delivered the opinion of the court.

By the third of our general rules it is provided: "This court considers the former practice of the courts of king's bench and of chancery, in England, as affording outlines for the practice of this court; and will, from time to time, make such alternations therein as circumstances may render necessary." 108 U.S. 574. This rule is, with the exception of some slight verbal alterations and the addition of the word "former" before

[ 157 U.S. Page 249]

     the word "practice" in the first line, the same as original general rule seven, adopted August 8, 1791. 1 Cranch, xvii; 2 Dall. 411. And in cases of original jurisdiction it has been determined that this court will frame its proceedings according to those which had been adopted in the English courts in analogous cases, and that the rules of court in chancery should govern in conducting the case to a final issue, Rhode Island v. Massachusetts, 12 Pet. 657; 13 Pet. 23; 14 Pet. 210; 15 Pet. 233; Georgia v. Grant, 6 Wall. 241; although the court is not bound to follow this practice when it would embarrass the case by unnecessary technicalities or defeat the purposes of justice. Florida v. Georgia, 17 How. 478.

It was held in Mallow v. Hinde, 12 Wheat. 193, 198, that where an equity cause may be finally decided between the parties litigant without bringing others before the court who would, generally speaking, be necessary parties, such parties may be dispenses with in the Circuit Court if its process cannot reach them or if they are citizens of another State; but if the rights of those not before the court are inseparably connected with the claim of the parties litigant so that a final decision cannot be made between them without affecting the rights of the absent parties, the peculiar constitution of the Circuit Court forms no ground for dispensing with such parties. And the court remarked: "We do not put this case upon the ground of jurisdiction, but upon a much broader ground, which must equally apply to all courts of equity whatever may be their structure as to jurisdiction. We put it upon the ground that no court can adjudicate directly upon a person's right, without the party being actually or constructively before the court."

In Shields v. Barrow, 17 How. 130, the subject is fully considered by Mr. Justice Curtis speaking for the court. The case of Russell v. Clarke's Executors, 7 Cranch, 98, is there referred to as pointing out three classes of parties to a bill in equity: "1. Formal parties. 2. Persons having an interest in the controversy, and who ought to be made parties, in order that the court may act on that rule which requires it to decide on, and finally determine the entire controversy, and do complete

[ 157 U.S. Page 250]

     justice, by adjusting all the rights involved in it. These persons are commonly termed necessary parties; but if their interests are separable from those of the parties before the court, so that the court can proceed to a decree, and do complete and final justice, without affecting other persons not before the court, the latter are not indispensable parties. 3. Persons who not only have an interest in the controversy, but an interest of such a nature that a final decree cannot be made without either affecting that interest, or leaving the controversy in such a condition that its final termination may be wholly inconsistent with equity and good conscience." Reference is made to the act of Congress of February 28, 1839, c. 36, 5 Stat. 321, and the 47th rule of equity practice.The first section of the statute, carried forward into section 738 of the Revised Statutes, enacted: "That where, in any suit at law or in equity, commenced in any court of the United States, there shall be several defendants, any one or more of whom small not be inhabitants of, or found within the district where the suit is brought or shall not voluntarily appear thereto, it shall be lawful for the court to entertain jurisdiction, and proceed to the trial and adjudication of such suit between the parties who may be properly before it; but the judgment or decree rendered therein shall not conclude or prejudice other parties, not regularly served with process, or not voluntarily appearing to answer; and the non-joinder of parties who are not so inhabitants, or found within the district, shall constitute no matter of abatement, or other objection to said suit," But Mr. Justice Curtis remarked that while the act removed any difficulty as to jurisdiction between competent parties regularly served with process, it did not attempt to displace that principle of jurisprudence on which the court rested Mallow v. Hinde, and so far as the 47th rule was concerned, that was only a declaration for the government of practitioners and courts of the effect of the act of Congress and of the previous decisions of the court on the subject of that rule. And Mr. Justice Curtis added: "It remains true, notwithstanding the act of Congress and the 47th rule, that a Circuit Court can make no decree affecting

[ 157 U.S. Page 251]

     the rights of an absent person, and can make no decree between the parties before it, which so far involves or depends upon the rights of an absent person that complete and final justice cannot be done between the parties to the suit without affecting those rights. To use the language of this court, in Elmendorf v. Taylor, 10 Wheat. 167: 'If the case may be completely decided, as between the litigant parties, the circumstance that an interest exists in some other person, whom the process of the court cannot reach, as if such party be a resident of another State, ought not to prevent a decree upon its merits.' But if the case cannot be thus completely decided, the court should make no decree."

Mr. Daniell thus lays down the general rule: "It is the constant aim of a court of equity to do complete justice by deciding upon and settling the rights of all persons interested in the subject of the suit, so as to make the performance of the order of the court perfectly safe to those who are compelled to obey it, and to prevent future litigation. For this purpose all persons materially interested in the subject, ought generally, either as plaintiffs or defendants, to be made parties to the suit, or ought by service upon them of a copy of the bill, or notice of the decree to have an opportunity afforded of making themselves active parties in the cause, if they should think fit." 1 Dan. Ch. Pl. and Pr. 4th Am. ed. 190.

The rule under some circumstances, not important to be considered here, may be dispensed with when its application becomes extremely difficult or inconvenient. Equity Rule 48.

Sitting as a court of equity we cannot, in the light of these well-settled principles, escape the consideration of the question whether other persons who have an immediate interest in resisting the demand of complainant are not indispensable parties or, at least, so far necessary that the cause should not go on in their absence. Can the court proceed to a decree as between the State and the Southern Pacific Company, and do complete and final justice, without affecting other persons not before the court, or leaving the controversy in such a condition that its final termination might be wholly inconsistent with equity and good conscience?

[ 157 U.S. Page 252]

     The boundaries of the State of California, as defined and established in the constitution under which the State was admitted into the Union, by the act of Congress approved September 9, 1850, embraced all the soil of the beds of the bay of San Francisco and the arms of the bay, including what was and is known as San Antonio estuary or San Antonio Creek, on the eastern side of the bay opposite to San Francisco. The tide ebbs and flows naturally in the estuary, which contains a natural tidal basin, and the bay and estuary are connected with the waters of the Pacific Ocean by the Golden Gate.

The contention of the State was that the legislature did not have the power to grant the water front to the town of Oakland, nor to any one, so as to create any title or interest in the grantee; nor to authorize the town to grant the entire water front to any person to be held and owned as his private property; that the act of May 4, 1852, did not authorize the town to grant its water front, namely, the lands lying within the limits of that town between high tide and ship channel, to Carpentier, nor to any one to be held as private property; that the ordinance of May 27, 1852, was not designed to confer on Carpentier an interest in the Oakland water front beyond thirty-seven years; that the ordinance was against public policy and void; that the deed of the president of the board of trustees was his individual deed, and, if valid, only conveyed for the life of Carpentier, because it did not run to him and his heirs; that the alleged grant was not consistent with the policy of the State; that the grant was revoked by the act of March 25, 1854, and was not confirmed by the act of May 15, 1861; that the act of March 21, 1868, did not authorize the city of Oakland to convey away the water front or to settle existing controversies in that way; that such a settlement would be contrary to public policy and contrary to the charter of the city.

The defendant contended that it is the settled law of this country that the ownership of and dominion and sovereignty over lands covered by tide waters belong to the respective States within which they are found, with the consequent right

[ 157 U.S. Page 253]

     to use or dispose of any portion thereof when that can be done without substantial impairment of the interests of the public in such waters, and subject to the paramount right of Congress to control their navigation so far as might be necessary for the regulation of commerce; that the State of California, in and by the act of May 4, 1852, made an irrevocable grant in praesenti to the town of Oakland of the title and property in all the lands lying within the corporate limits of the town between high tide and ship channel, with the power and right to alien and convey the lands or any part of them for the purposes contemplated by the act; that the act of March 25, 1854, did not, by its own terms or otherwise, operate as a repeal of that grant; that the grant was confirmed and ratified by the legislature of California by the act of May 15, 1861, and by the council of the city of Oakland by and under the authority of the act of March 21, 1868; that the grant was made in pursuance of the settled policy of the State, and created no interference with or impairment to the bay of San Francisco, nor impaired or interfered with the interests of the public in the waters of that bay or any part thereof, or with the legislative power of the State to regulate or use all the waters in behalf of the public for the purposes of navigation. It was further contended that the State was estopped from denying the effect of the act of May 4, 1852, to convey and pass a valid title to the lands embraced by it to the town of Oakland, and estopped by the acts of May 15, 1861, and of March 25, 1868, respectively, to deny the validity of the title of Carpentier and those claiming under him; and that the city of Oakland was also estopped to deny the effect of the ordinances of the town of Oakland of May 27, 1852; January 1, 1853; August 27, 1853; and of the deed of conveyance by the president of the board of trustees of the town, to grant and convey a valid title in fee simple in the lands in controversy to Carpentier by the operation of the ordinances of the city of April 1 and 2, 1868, under the act of the legislature to March 21, 1868, authorizing the city to settle its controversies with Carpentier. And further, that the confirmation of the ordinances and deed of the town of Oakland by the ordinances

[ 157 U.S. Page 254]

     of the city of Oakland under the act of 1868, besides again validating the ordinances and the deed of conveyance of the town, operated as a grant by the city of Oakland and the State of California of the land in fee simple absolute to the Oakland Water Front Compoany as grantee or alienee of Carpentier.

On behalf of the city of Oakland, which was permitted to be heard at the bar by counsel as amici curiae, it was insisted that the original grant of the water front to the town of Oakland had never been revoked; that the city was simply the town's successor in that regard; and that its rights thereunder, of whatever nature, had in no manner been affected by any exertion of the legislative power of the State. Admitting that a municipal corporation as such has no proprietary interest or riparian rights in tide lands situated within its corporate limits, the city claimed that title had passed to it from the State; that, regarded as holding in trust as a governmental agency, nevertheless it had an interest in the grant of individual advantage, and that, in any view, as an existing corporate entity clothed with powers to be locally exercised, though for the general public good, it could not be divested thereof in the absence of legislation to that end by proceedings in which it was not allowed to participate as a litigant. But counsel for the State argued that whatever construction might be put upon the acts of the legislature relating to the city of Oakland, in connection with the water front, the State retained its sovereign power to preserve it for the use of the public free from obstruction, and could alone, by its attorney general, maintain the action; that the city was no more interested in the suit directly or collaterally than any administrative agency would be; that the grant by the act of May 4, 1852, was not in absolute ownership, but in trust for improvement; and that the grant was revoked by the repeal of the act of May 4, 1852, by section 19 of the act of March 25, 1854.

The pravyer of the bill was, among other things, for a decree adjudging that the State could not make such a grant to the town; that the town of Oakland had no authority to grant or convey all its water front or any part thereof; and that any

[ 157 U.S. Page 255]

     control conferred on the town by the act of 1852 was annulled by the act of 1854.

But it was said that, notwithstanding the breadth of the prayer, relief, if accorded, would be confined to the seven specified parcels, and that the decree would not bind those claiming interests in other parts of the water front, although as to the particular parcels, defendant's lessors, the Central Pacific Railroad Company and the South Pacific Coast Railway Company and its grantor, the Oakland Water Front Company, all corporations and citizens of California, would be bound. Considered, however, in reference to the main contention of the State, namely, the want of power to make the grant of the entire water front at all, the argument treated the water front as one and indivisible for the purposes of the case. Indeed, it was insisted that even if it were conceded that the legislature could empower a municipality to deal with parts of its water front in the interest of the public by authorizing the construction of improvements to a certain extent, creating so far a proprietary interest in those thus authorized, yet that such action as to portions of the grant, though sustainable if independent thereof, must be regarded as involved in the invalidity of the entire grant. Irrespective, then, of the extent, technically speaking, of the effect and operation of a decree as to the seven parcels, based on that ground, as res adjudicata, it is impossible to ignore the inquiry whether the interests of persons not before the court would be so affected and the controversy so left open to future litigation as would be inconsistent with equity and good conscience.

Without questioning in any way the authority of the attorney general of the State of California to institute this suit, it is admitted that it was not directed to be commenced by any act of the legislature of that State. If this court were of opinion that the city of Oakland occupied the position of the successor merely of the town of Oakland; that the grant of the water front to the town was as comprehensive as is claimed by defendant, and that it had not been annulled by any act of the legislature, but also held that the State had not power to make such grant, then the city of Oakland would be deprived

[ 157 U.S. Page 256]

     of the rights it claims under the grant, not by the exercise of the legislative power of the State as between it and its municiplity, but by a judicial ...


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