Puget Sound Alumni of Kappa Sigma, Inc. v. City of Seattle

Hale, J.

(dissenting) — The city of Seattle, according to estimates made by its counsel, granted 138 street vacations between April 1, 1960, and April 1, 1963, 92 of which required payment of a fee. Based on the city’s time-honored formula of requiring the abutting owners to pay one-half the appraised value as a condition for vacating, the city, during this 3-year period, would have received $337,124.04, plus $100 for each vacation granted.

Thus, millions of dollars have probably come into the city treasury in this fashion since adoption of the formula by resolution in 1937. Under the majority decision, not only must a large sum of money be refunded to the abutting owners, but, more importantly, in all future street vacations, the municipal treasury will gain little or nothing when the city conveys its highly valuable tenure in real estáte.

Í see little authority for and no merit whatever in the proposition that, once a city has decided it has little úse for *237 its property, it must give that property away. After all, a street to be vacated represents but one of many forms of surplus property from which the city should derive some consideration. The city’s property belongs to all of its citizens; its officers and employees, whenever parting with anything the city owns, are bound in law to negotiate on behalf of their principal the best possible bargain, keeping ever in mind the municipality’s best interests. The rule just announced in the majority opinion does violence to this idea; it compels the city to give away that which it acquired on behalf of the public for whom it holds all property in trust. Under the majority ruling, once the city has decided that the public service no longer needs the property, it not only must give it to a special class of persons strategically located to receive it, but, of more serious consequence, ask nothing for it on behalf of the beneficiaries for whom it was originally acquired.

If, as the majority seems to have done, we declare a rule that the city of Seattle, in vacating a public street and thereby surrendering to adjoining owners its valuable rights in real property must do so without recompense to the public treasury, but, contrarily, must give such valuable property away to the abutting owners, I would characterize such a ruling with the borrowed hyperbole from Lockwood & Strickland v. Chicago, 279 Ill. 445 , 117 N.E. 81 (1917) , 1 cited by the majority, that “Such a holding would be dangerous in principle, contrary to good morals and against public policy.”

I have no quarrel with the view that vacated streets shall inure to abutting property owners as expressed in RCW 35.79.040 (Nystrand v. O’Malley, 60 Wn.2d 792 , 375 P.2d 863 (1962), affirming Burmeister v. Howard, 1 Wash. Terr. 207 (1867)), but cannot accept as a necessary corollary thereto that the city may not require of the abutting own *238 ers a substantial recompense for such surrender. I see no rational connection between a law declaring that vacated streets belong to the abutting owners and a rule which forbids the city from seeking some compensation for parting with its property.

What the city is surrendering has, as the majority points out, been termed an easement, but, in my view, it represents a tenure in land that resembles a fee simple absolute and in some ways rights in land of an even stronger and more abiding nature than those of a fee ownership. The city’s rights and interests in the streets, for example, cannot be vitiated for nonpayment of taxes.

Article 11, § 12, of the Washington State Constitution says:

The legislature shall have no power to impose taxes upon . . . cities ... or property thereof .... Article 7, § 1, Washington State Constitution, in part declares that

Property of the . . . counties, school districts and other municipal corporations . . . shall be exempt from taxation ....

Again, unlike private ownership in fee, the city’s possessory rights in its streets may not be disturbed or infringed by adverse possession or prescription. Commercial Waterway Dist. No. 1 of King Cy. v. Permanente Cement Co., 61 Wn.2d 509 , 379 P.2d 178 (1963). The city cannot be forced to vacate. It enjoys an immunity from alienation and prescription unknown to fee simple tenure. The decision to vacate a public street under our statutes lies solely in the legislative authority of the city, a decision that body cannot be compelled to make even though the street is unimproved and unopened and the abutting owners show continuing occupancy and greater need of it than the public.

RCW 35.79 prescribes the exclusive method by which abutting owners may seek a street vacation and RCW 35.79.010 gives the legislative authority — the city council —sole discretion as to whether a petition to vacate shall be granted or denied. Thus, the council makes its *239 decision free of the coercive pressure that the municipality may have already lost its street by adverse possession or prescription. I would thus conclude that the city council, at the behest of abutting owners, can no more be forced to pass a street vacation ordinance, no matter how fair and reasonable it may be, than it could be compelled, as in Besselman v. Moses Lake, 46 Wn.2d 279 , 280 P.2d 689 (1955), to pass a rezoning ordinance, for such enactments represent the exercise of legislative discretion.

Nor is the city’s easement, as distinguished from private ownership in fee, subject to condemnation by other municipal corporations except pursuant to special statute. We said in State ex rel. Cle Elum v. Kittitas Cy., 107 Wash. 326 , 181 Pac. 698 (1919), that property which is devoted already to a public use by one municipal corporation may not be condemned for a different public use by another if the existing public use will be destroyed or markedly disturbed. 11 McQuillin, Municipal Corporations § 32.67 (3d rev. ed. 1964); 1 Nichols, Eminent Domain § 2.2 (3d rev. ed. 1964); Rhyne, Municipal Law § 17-3 (1957).

Finally, as a crowning manifestation of the city’s superior tenure when compared to that of a fee ownership, we have its freedom from creditor’s rights. The city’s possession, easement and rights in the streets may not be impaired or abrogated for debts and defaults nor through execution, attachment or sequestration. No creditor’s rights may run against the city’s possessory rights. Thus, its easement is free of the one most harrowing and frequently fatal burdens from which privately held lands suffer perpetual jeopardy — compulsory sale under creditor’s execution.

The tenure in land surrendered by a city in vacating a street, therefore, runs wide and deep, being subject neither to alienation or diminution for nonpayment of taxes, nor to adverse possession or prescription, nor by eminent domain from other municipal corporations except under special legislation, nor from such process of judicial compulsion as attachment, foreclosure or execution. The municipality’s rights thus constitute a tenure amenable to no extraneous *240 compulsion and subject to alienation only through the council’s legislative discretion. This means that, when the city vacates a street, it actually parts with and turns over to the abutting owners not a mere easement, but extremely valuable rights in land.

Therefore, the city ought not be allowed, much less be compelled, to yield its property without securing for its people maximum benefits therefrom, for the legislative act of vacating a street is an act of public business, and the public business should be transacted in the public interest on the best terms attainable. The streets, being held in trust for the public by the city, ought not be vacated unless for a public purpose. Young v. Nichols, 152 Wash. 306 , 278 Pac. 159 (1929). But reversion to the abutters does not convert the transaction into one for a private benefit if the public benefit and purpose is likewise served (11 McQuillin, Municipal Corporations § 30.186a (3d rev. ed. 1964)), even though the benefits to the abutting owners may be greater and more direct than to the public.

Thus, although the courts recognize that street vacations are for a public purpose, they have not excluded the idea that greater benefits to private persons may accrue therefrom. Such public benefits as relief from responsibility for maintenance and repair, substitution of new routes to existing streets and improving access to others, or eliminating sources of liability for injuries and damage, while deemed public purposes or benefits derived from the vacation, along with other benefits, do not obscure the greater and more direct benefit inuring to the abutting owners whose freeholds gain a direct increment from the vacation. The statutes (RCW 35.79.010 and RCW 35.79.030) recognize this private benefit by providing that vacation proceedings may be initiated by petition of two-thirds of the owners of the abutting property and it is unlikely that such owners would bring such petitions unless they were convinced the vacation would be to their benefit.

Because RCW 35.79.040 and the decisional law protect the abutting owners by preventing the city from conveying *241 the streets to third persons or strangers once the city has decided upon the vacation, this ought not prevent the city from requiring remuneration or fee therefor on behalf of the public. Neither the statutes nor, so far as I can determine, do the decisions, prohibit payment of a reasonable and fair recompense as a condition to turning over to the abutting owners the public’s property rights in the streets. After all, the value of such vacated lands derives in large part from the public’s expenditures in developing the city — in building streets, alleys, parkways, boulevards, installing water, sewage and hydroelectric systems, maintaining libraries, parks, playgrounds and auditoriums, providing police and fire protection and public transportation, maintaining and staffing sanitary and medical facilities, rodent control agencies, and providing at public expense all of the other services and facilities so essential to life in a modern city.

This case illustrates the substantial value vacated streets may acquire with the passing years. Following are the amounts ordered refunded by the trial court as representing only one-half the market value of the lands reverting to the abutters:

Plaintiffs Amount Date Paid

Puget Sound Alumni of Kappa $4850.00 Sept. 6, 1960

Sigma, Inc., a Washington corpora- 262.50 Aug. 8, 1960 tion Chris Berg, Inc. 2800.00 Oct. 26, 1962

Lee Martin and Loretta M. Martin, his wife, 7900.00 Nov. 7, 1960

Samual Spilk and Victoria L. Spilk, his wife, 8900.00 Nov. 28, 1960

John J. Neville and Alice Neville, his wife, 3250.00 Sept. 6, 1960

Russell Mowry and Jane Doe Mo wry, his wife, 50.00 Oct. 17, 1960

Charles H. Davies and Joyce P. Davies, his wife, 150.00 June 8, 1961

Thor S. Goodman and Josephine Goodman, his wife, 1775.00 July 24, 1961

Paul J. Berlin and Pearl E. Berlin, his wife, 510.00 Dec. 20, 1962

I would think the city council derelict in its duties had it not exacted for the public, on whose behalf it functions, a reasonable recompense for surrendering the public’s prop *242 erty in lands having so substantial a worth, even though the surrender were in part for a public purpose. And I can think of no fairer way in determining whether the exaction be reasonable than to base it on the market value, as determined by a fair appraisal. Considering the value and benefit to the reverters, 50 per cent appears not unfair, although that, I would say, is largely a legislative question to be determined by the legislative body of the city and not by the courts.

The rationale of Baxter-Wyckoff Co. v. Seattle, 67 Wn.2d 555 , 408 P.2d 1012 (1965), seems to me controlling of the instant case. There, two lumber companies for several years had occupied, maintained and used some industrial buildings erected on the land dedicated for Southwest Florida Street, Seattle — a street which, with minor exceptions, had not been opened to travel since its platting in 1897 or its annexation to Seattle in 1905. Pursuant to § 13 of ordinance No. 90047, the Board of Public Works of Seattle had been authorized to issue annual permits for the industrial and commercial use of unopened public streets and had adopted a schedule of fees calling for 10 cents per square foot for the first one thousand feet and 5 cents thereafter in one category and 5 cents per square foot for the first one thousand feet, reduced to 1 cent thereafter in another.

Under this schedule, Baxter-Wyckoff Lumber Company for several years paid to the city an annual permit fee of $2,156.60, and the Nettleton Lumber Company similarly paid $425.05. The case arose when, in 1958, the two companies refused to pay these annual permit fees, claiming that the fees demanded were illegal revenue-raising charges having no reasonable relation to the cost of administering, inspecting and policing connected with issuing the permits. The trial court, accepting plaintiffs’ views, enjoined the city from making further collections of the annual permit fees, but without prejudice to recomputing and collecting them in an amount reasonably related to the costs of the administration, inspection and policing required in their issuance.

*243 This court reversed. We said there that “The abutting landowner has no right to build permanent structures in the street nor to set up storage yards therein for private business purposes.” In the present case, we should likewise say that the abutting owners have no right either to the occupancy or vacation of the street.

In Baxter-Wyckoff, we said:

[T]he permit granted by the city to respondents in this case was the grant of a mere privilege, and that the use granted could be prohibited by the city absolutely or could be granted upon such terms and conditions as the city may see fit to impose.This is not a mere matter of municipal regulation. The conditions under which such a privilege will be granted by the city is a matter entirely within the discretion of the city council.

The courts have never taken it upon themselves to review the appropriateness of imposing conditions on such a privilege nor to substitute their judgment for that of the municipal authorities.

We should say the same here for the abutting owners have no more power to compel a permanent transfer in the instant case than they had to enforce a temporary user in that case. Because vacation of a street rests exclusively with the power of the city council, acquisition by vacation is a mere privilege in the instant case in the same way that temporary occupancy was in the Baxter-Wyckoff case. In Baxter-Wyckoff, we approved of an annual fee for temporary uses of the vacant street; why should there be no fee at all for a permanent surrender of the same property?

Our language concluding the Baxter-Wyckoff case, supra, is susceptible of direct application in the present cause:

Since, as we have seen, the city has plenary power to refuse to permit any person to build or maintain, in a public street, a permanent structure for use in the conduct of his private business, it follows that the city may charge such fees and impose such other conditions with respect to such use as it deems proper. Consequently, the courts may not enjoin the collection of fees by the city therefor regardless of the amount thereof. Ordinance No. 90047 is admitted to be valid and we are of the opinion *244 that the fees charged respondents for the permits issued thereunder may not be reviewed by the courts.

Finally, no statute has come to my attention which forbids the city from requiring a payment into the city treasury for vacating the lands and yielding to the abutting owners on their petition the city’s tenure in the streets. The city, holding as it does all of its property in trust for all of its citizens is under a duty to exert its best efforts on behalf of the people it serves when surrendering any property or rights in property to any private person. I think the courts should sustain it in carrying out such a trust. See State ex rel. Myhre v. Spokane, ante p. 207, 422 P.2d 790 (1967), which sustains a contract under which the city accepted $75,000 from land developers to be spent on street construction in the area of a new shopping center.

Accordingly, I would reverse the judgment and order the case dismissed.

A few comments on the subsidiary points discussed by the majority seem appropriate. The want of a precise label for the exaction ought not affect its validity or operation. Whether it be termed a fee, rental, conditional stipend, payment, compensation, tax, permit, consideration, or whatever, has little to do with operation or legal effect. Its validity should be measured by ascertaining whether in exacting the fee the city acts within its corporate powers for a public purpose, not by the tag we may put upon it.

Another point: Since the resolution of 1937, under which the $100 filing fee and the one-half appraisal value required as condition precedent to vacation have in each instance been followed by a formal ordinance of vacation, I see no reversible defect in this time-honored procedure although I recognize that the city could in advance be judicially compelled to supplement that resolution with an ordinance or, in the alternative, abandon the procedures set up by it.

Finally, even though the resolution of 1937 under which, the city operates be deemed an invalid exercise of the city’s legislative authority, plaintiffs are not entitled to the relief sought. They ought not be allowed to simulta *245 neously claim under it and denounce it as a nullity. They should be estopped from keeping the benefits under the resolution and at the same time claiming it void.

Respondents had several other avenues of procedural attack open to them in challenging the 1937 resolution: mandamus and prohibition, to prevent the city from considering further vacation in pursuance of it; bringing petitions in vacation before the city council under RCW 35.79 without reference to the resolution; or tendering a return of the land in rescission to obviate claiming under it. But, having eaten their cake, they ought not have it too. At the very least, basic equity requires a rescission and restoration of the streets to the city before and as a condition to ordering a refund of the money to the abutting owners.

The cause should be reversed and dismissed.

Finley, C. J., concurs with Hale, J.

The Illinois legislature subsequently remedied this decision by authorizing cities to make a charge for street vacations. People ex rel. Franchere v. Chicago, 321 Ill. 466 , 152 N.E. 141 (1926), upheld this right and in effect overruled the decision of Lockwood & Strickland v. Chicago, 279 Ill. 445 , 117 N.E. 81 (1917).